SB 661 – Creates a phased-in individual income tax deduction for business income and reduces the corporate income tax rate over a five-year period

• Sponsor: Schmitt
• LR Number: 5177S.03C
• Committee: Jobs, Economic Development and Local Government
• Last Action: 5/18/2012 - S Informal Calendar S Bills for Perfection--SB 661-Schmitt, with SCS (pending)
• Title: SCS SB 661
• Effective Date: August 28, 2012

Current Bill Summary

SCS/SB 661 - This act reduces the corporate income tax rate from its current six and one-forth percent of Missouri taxable income each year over a five year period. For the 2012 tax year taxable corporate income will be taxed at five and five-eighths percent. Once fully phased-in, taxable corporate income will be taxed at three and one-eighth percent for the 2016 tax year and all subsequent tax years.

The act also creates an individual income tax deduction for business income and phases it in over a five-year period. Taxpayers will be allowed to deduct five percent of business income for the 2012 tax year and, once fully phased-in, will be allowed a twenty-five percent deduction for all tax years after the 2015 tax year. Shareholders of S corporations and partners in partnerships will be allowed a proportional deduction based their share of ownership.

This act is similar to SCS/SB 146 (2011).

EMILY KALMER