The top income tax rate in Missouri will be reduced to 4.95% next year, and could go as low as 4.5% under a tax cut bill the state House of Representatives passed today and is sending on to Governor Mike Parson.
An income tax cut was one of two topics Parson cited when calling for the special session currently underway in Jefferson City.
The law also exempts the first $1,000 of taxable income after the standard deduction for all taxpayers, but it does not increased the standard deduction as Gov. Parson had requested.
“This bill means our administration will have cut Missourians' income tax rate by almost a full percentage point or a nearly 15 percent decrease,” Parson said in a statement, indicating he would sign the bill.
The legislature passed a one-time, nonrefundable tax credit earlier this year. Parson vetoed that bill, because he said it did not apply to enough people and was only temporary.
The House passed the senate’s version today on a 98-32 vote, but not without dissent, even from some lawmakers who supported it.
Bill Kidd, R-Buckner, voted for the measure, but said legislators need to reduce taxes that affect poorer residents, namely property and personal property taxes.
“If you’re a low-bracket income earner, or you’re a fixed-income earner, this tax cut really isn’t going to do much for you at all. That’s the truth,” Kidd said.
Rasheen Aldridge, D-St. Louis, voted against the tax cut and said he’s upset the House stripped out a measure that would have lowered sales taxes on personal hygiene products including diapers and tampons.
“You’re talking about items that are an essential need, not a luxury. Talking about when people are struggling to keep their lights on and giving them some relief in their pocket when they have to purchase these items,” Aldridge said.
The House failed to pass an emergency clause, which means the measure can not take effect immediately and will be implemented next year.
The legislature’s special session isn’t over yet. The House and Senate have yet to pass an agricultural tax credit plan, the other plank of Parson’s call for lawmakers to reconvene.
Both chambers are scheduled to return next week.
“Next week, we look forward to progress being made on the agriculture bill, so we can sign both pieces of legislation into law,” Parson said.
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