JEFFERSON CITY— Missourians could soon see the biggest tax overhaul in the state in nearly 90 years under a proposal that recently received first-round approval in the Missouri Senate. Senate Bill 26 would cut personal and corporate state income taxes on hard-working Missourians while freeing up capital for job creators across the state. The last time the state Legislature cut income taxes was in 1921.

Senate Leader Tom Dempsey, R-St. Charles, said this broad-based tax relief will help send a strong signal that the Show-Me State is open for business.

“Tax reform is a crucial part of our economic development policy,” said Dempsey.  “This bill is a priority for this legislative session. Providing tax relief to all working Missourians, employers and businesses will make us one of the most competitive states in the country.”

Under the proposal, Senate Bill 26 would lower personal and corporate state income tax by .75 percent over a five-year span.  Small businesses would be allowed a 50 percent deduction for business income, which would be phased in over a five-year period. The measure would also raise the state sales and use tax by a one-half percent, phased in over five years. The measure is expected to cut taxes across the state by $450,000,000.

Bill sponsor, Senator Will Kraus, R-Lee’s Summit, says the tax cut in conjunction with tax credit reform will ultimately have a positive return on the state budget.

“This pro-growth, pro-jobs bill will allow us to put money back into tax payers’ hands so they can go out and spend it and create more jobs,” said Kraus. “I’ve never worked a bill harder than I have worked this bill.”

Majority Floor Leader Ron Richard, R-Joplin, said the Senate proved they can work to compromise on important legislation.

“Unlike Washington D.C., we aren’t addicted to taxing and spending,” said Richard. “Here in Missouri we are cutting inefficient programs and providing the savings to working Missourians and job creators.”

The bill needs another vote of approval before it heads to the House for its consideration. For more on this bill and others, go to www.senate.mo.gov.