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Missouri economic development bills to watch in 2025: Housing, income tax cuts and right-to-work

RideKC Development Corp. issued a property tax exemption to the Jamestown project in 2022. This housing development is located at 39th Street and State Line Road.
Chase Castor
/
The Beacon
RideKC Development Corp. issued a property tax exemption to the Jamestown project in 2022. This housing development is located at 39th Street and State Line Road.

More than 1,000 bills have been introduced in the Missouri General Assembly this session, but only a few will get passed and signed by Gov. Mike Kehoe. Housing, taxes and right-to-work proposals are all on the table.

Missouri’s 2025 legislative session is kicking into gear, and lawmakers are weighing in with ideas on how to manage the state’s $455 billion economy.

For the next five months, lawmakers will consider what kind of businesses to boost, how landlords will be allowed to manage their properties and whether to overhaul Missouri’s income, sales and property taxes.

These bills are only proposals for now. They could be amended — in some cases, dramatically — before they ever come to a vote. More than 1,000 bills have been proposed this year, and only a few will pass the House and Senate and get a signature from Gov. Mike Kehoe. You can find a guide to following the legislative session here.

Here’s a guide to some of the legislative proposals that could affect development, taxes and the economy.

Tax credits

Missouri issued nearly $500 million in tax credits last year, including for housing, agriculture and small businesses.

A tax credit is when the government gives a person or business a dollar amount that can be credited to their tax bill.

Some bills would create new tax credits for specific businesses and industries.

Those include housing for victims of domestic violence (House Bill 279) and measures to encourage urban farms and grocery stores in food deserts (House Bill 589) and organizations that provide services for homeless people (Senate Bill 129).

Those bills are sponsored by Democrats, Rep. Raychel Proudie from Ferguson, Rep. Emily Weber from downtown Kansas City and Sen. Barbara Washington from eastern Kansas City, respectively.

Rep. Sherri Gallick from Cass County and Sen. Kurtis Gregory from Marshall, both Republicans, want to create a program called the Missouri Angel Investment Incentive Act. If House Bill 235 and Senate Bill 461 pass, the program would award tax credits to tech companies in rural counties.

House Bill 501 would give tax credits to sports organizations based on the number of tickets sold, sponsored by Republican Rep. Brad Christ from St. Louis County.

Another set of bills — House Bill 610 and Senate Bill 35 — would offer tax credits to developers in downtown areas of small cities like Joplin, Kirksville, Lebanon and Sikeston.

Three other bills target more industrial activity.

House Bill 755 would incentivize advanced manufacturing, and a pair of bills in the House and Senate would give tax credits to small- and medium-sized railroad companies.

Housing

Rep. Greg Sharpe, a Republican from the northeast corner of Missouri, is sponsoring two bills that would incentivize housing development.

House Bill 240 would create new incentives to rehabilitate blighted land or to construct new housing in the aftermath of a major disaster. His other bill, House Bill 245, would create a state fund to build workforce housing in rural areas that are experiencing a housing or worker shortage.

In the Senate, Republican Rep. Nick Schroer from St. Charles County is proposing a bill that would prohibit cities from passing laws affecting tenants and landlords in a few ways.

His Senate Bill 507 would override any law that requires landlords to accept tenants who use Section 8 vouchers — including Kansas City’s source-of-income discrimination ban.

The bill would also allow any landlord in the state to perform a background check on a potential tenant. It also would eliminate caps on security deposit amounts and prohibit cities from giving tenants the right of first refusal.

The “right of first refusal” is when a landlord is required to give their tenants the choice to purchase their building before selling it to another buyer.

Income tax

A handful of bills propose changes to income taxes in Missouri, some of them more dramatic than others.

Senate Joint Resolutions 31 and 32, sponsored by Sens. Ben Brown and Brad Hudson respectively, would create a plan to phase out both individual and corporate income taxes by capping state spending and placing any unspent tax dollars into a “tax reform fund.” The resolutions would also place a 6% sales tax on lobbying services.

Both Republicans, Brown represents a district west of St. Louis, and Hudson represents a district on the Arkansas border.

Another bill, sponsored by Republican Sen. Mary Elizabeth Coleman of Jefferson County, would simply eliminate the individual income tax.

Other bills, including Senate Bill 151 and 228, propose flattening the income tax to 4% or propose an income tax deduction for capital gains.

Business taxes

A bill sponsored by Coleman would end a business license tax for small businesses with less than $10,000 in gross sales receipts.

Sen. Mike Moon, a Republican who represents the southwest corner of the state, and Rep. Jeff Vernetti, a Republican who represents the Lake of the Ozarks area, proposed bills in the Senate and House to phase out the corporate income tax.

Another pair of bills would create new tax exemptions for workers and businesses in opportunity zones — distressed areas that are eligible for federal tax incentives.

House Bill 499 and Senate Bill 381 would establish earnings tax in opportunity zones in Missouri. That would mean that any person living or doing work in an opportunity zone would be exempt from paying earnings taxes, as well as any company based in or making a profit in an opportunity zone.

The bills are sponsored by Rep. Christ from St. Louis County and Republican Sen. Travis Fitzwater from a district that extends from the Mississippi River to Fulton.

Property taxes and assessments

A few proposals could affect property taxes.

Senate Bill 171, sponsored by Republican Sen. Joe Nicola of Grain Valley, would lower the personal property assessment rate that counties use to calculate the taxes paid on cars from 33.3% to 0.3% by 2036.

House Bill 517, sponsored by Republican Rep. Mark Matthiesen of St. Charles County, would lower the cap on how much inflation could affect a property’s assessed value.

One of the more aggressive proposals is a full property tax exemption for any Missourian over the age of 65 who makes less than $150,000 per year — House Joint Resolution 42, sponsored by Republican Rep. Bill Lucas of Jefferson County.

Other bills affecting economic development

Weber from Kansas City proposed House Bill 579 to require anyone who purchases land in Missouri to disclose the sale price to the county recorder.

A bill proposed by Republican Sen. Jason Bean — who represents the bootheel counties in southeast Missouri — would allow counties to pass “right-to-work” laws that prohibit employers from requiring their employees to be members of a union.

If a county wanted to pass a right-to-work law, it would need to be approved by the voters in that county.

Missouri voters rejected a statewide right-to-work proposition in 2018, with 67% of Missourians voting no. It was rejected by majorities of voters in 100 out of 115 counties, including 53% of voters in the district Bean now represents.

This story was originally published by The Beacon, a fellow member of the KC Media Collective.

Josh Merchant is The Kansas City Beacon's local government reporter.
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