COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.:2611S.01I Bill No.:SB 658 Subject:Estates, Wills and Trusts; Taxation and Revenue - Income Type:Original Date:March 3, 2025Bill Summary:This proposal modifies provisions relating to the taxation of estates and
trusts.
FISCAL SUMMARY
ESTIMATED NET EFFECT ON GENERAL REVENUE FUNDFUND AFFECTEDFY 2026FY 2027FY 2028General Revenue($19,527)(Up to $87,264,064)(Up to $87,264,064)Total Estimated Net
Effect on General
Revenue($19,527)(Up to $87,264,064)(Up to $87,264,064)
ESTIMATED NET EFFECT ON OTHER STATE FUNDSFUND AFFECTEDFY 2026FY 2027FY 2028Total Estimated Net
Effect on Other State
Funds $0$0$0
Numbers within parentheses: () indicate costs or losses. L.R. No. 2611S.01I
Bill No. SB 658
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ESTIMATED NET EFFECT ON FEDERAL FUNDSFUND AFFECTEDFY 2026FY 2027FY 2028Total Estimated Net
Effect on All Federal
Funds $0$0$0
ESTIMATED NET EFFECT ON FULL TIME EQUIVALENT (FTE)FUND AFFECTEDFY 2026FY 2027FY 2028Total Estimated Net
Effect on FTE 000
☒ Estimated Net Effect (expenditures or reduced revenues) expected to exceed $250,000 in any
of the three fiscal years after implementation of the act or at full implementation of the act.
☐ Estimated Net Effect (savings or increased revenues) expected to exceed $250,000 in any of
the three fiscal years after implementation of the act or at full implementation of the act.
ESTIMATED NET EFFECT ON LOCAL FUNDSFUND AFFECTEDFY 2026FY 2027FY 2028Local Government$0$0$0 L.R. No. 2611S.01I
Bill No. SB 658
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FISCAL ANALYSIS
ASSUMPTION
Section 143.341- Taxation of Estates & Trusts
Officials from the Department of Revenue (DOR) note this proposal would change how
resident estates and trusts are taxed. Currently a resident estate or trust is one in which the estate
or trust was created at the time of the owner’s death, and they were a Missouri resident at their
death. The estate or trust is required to file fiduciary tax on behalf of the estate or trust. Section
143.311 requires that resident estates and trusts are taxed the same as individual when paying
income tax. Additionally, the statutes specify that the fiduciary tax rate is the same rate as the
individual income tax rate of 4.7% in tax year 2025.
The Missouri taxable income of a resident estate or trust means its federal taxable income with
the following adjustments. The estate or trust can subtract the allowable federal personal
exemption deduction and can make adjustments to their federal taxable income per Section
143.341. This proposal would add another subtraction to Section 143.341.
This will require resident estates and trusts to make a new hypothetical determination in order to
calculate their Missouri taxable income. The new hypothetical determination is “the amount
included in Missouri taxable income of the estate or trust that would not be included as Missouri
taxable income pursuant to section 143.381, as if said estate or trust were considered a
nonresident estate or trust as defined in section 143.371.” Therefore, the Missouri resident trust
would get a nonresident credit.
This proposal attempts to allow a resident estate or trust to include in its Missouri taxable income
only items of income, gain, loss, or deduction from sources within Missouri, and additionally,
receive a benefit from a credit for income tax paid to another state under section 143.081. This
would allow them to limit their income to Missouri-sourced income and get a full credit for the
income. This would end up treating them differently than individual filers. Individual filers
must report all income regardless of its source and then get a credit for the amount of tax paid to
another state.
This proposal would significantly reduce the amount of income that a resident estate or trust
would pay tax on. DOR notes that in fiscal year 2024, DOR collected $87,264,064 in fiduciary
tax. DOR notes that allowing resident estates and trusts to apportion their income and then also
claim a credit would provide a significant tax advantage to them. It would also significantly
reduce the amount of tax owed to Missouri. DOR is unable to estimate the actual amount that
could be reduced by assumes it could be up to the $87,264,064 currently collected.
This would require DOR to create a new form at a cost of $10,000 for the reporting of this newly
created calculation and modification of the MO-1041 at a cost of $2,200. This will also require
the department’s computer system to be updated at a cost of $7,327. L.R. No. 2611S.01I
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Oversight notes the DOR requests a one-time cost for website income-tax changes and updates
to comply with the proposed language; Oversight does not have any information to the contrary.
Therefore, Oversight will reflect the above administrative costs to DOR in the fiscal note.
Officials from the Office of Administration - Budget and Planning (B&P) note this proposal
would allow Missouri estates and trusts to subtract the Missouri apportioned income from their
Missouri taxable income, starting with tax year 2026.
B&P notes that this essentially allows estates and trusts to eliminate their Missouri income tax by
classifying all income as earned outside of Missouri. Missouri collected $87,264,064 in fiduciary
tax during FY2. Therefore, B&P estimates that this proposal will reduce TSR and GR by up
$87,264,064 annually beginning FY27 (for tax year 2026 income).
Oversight notes officials from B&P and DOR both assume the proposal will have a direct fiscal
impact on state revenues. Oversight does not have any information to the contrary. Therefore,
Oversight will reflect DOR’s and B&P’s estimated impact in the fiscal note.
FISCAL IMPACT – State GovernmentFY 2026
(10 Mo.)
FY 2027FY 2028GENERAL REVENUE FUNDCost - DOR - §143.341 - form and
computer updates($19,527)$0$0
Revenue Reduction - §143.341 -
Changes to the taxation of estates and
trusts $0
(Up to
$87,264,064)
(Up to
$87,264,064)
ESTIMATED NET EFFECT ON
GENERAL REVENUE FUND($19,527)
(Up to
$87,264,064)
(Up to
$87,264,064)
FISCAL IMPACT – Local GovernmentFY 2026
(10 Mo.)
FY 2027FY 2028$0$0$0
FISCAL IMPACT – Small Business
No direct fiscal impact to small businesses would be expected as a result of this proposal. L.R. No. 2611S.01I
Bill No. SB 658
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FISCAL DESCRIPTION
For all tax years beginning on or after January 1, 2026, this act provides an income tax deduction
for the amount included in Missouri taxable income of a resident estate or trust that would not be
included as Missouri taxable income if said estate or trust were considered a nonresident estate
or trust. Such deduction shall only apply to the extent it is not a determinant of the federal
distributable net income of the estate or trust.
This legislation is not federally mandated, would not duplicate any other program and would not
require additional capital improvements or rental space.
SOURCES OF INFORMATION
Department of Revenue
Office of Administration - Budget and Planning
Julie MorffJessica HarrisDirectorAssistant DirectorMarch 3, 2025March 3, 2025