SCS/SB 52 - This act modifies several provisions relating to taxation.INDIVIDUAL INCOME TAX
Current law provides for a reduction in the top rate of income tax over a period of years from 6% to 5.5%, with each cut becoming effective if net general revenue collections meet a certain trigger, with an additional reduction in the top rate of tax of 0.4% to take effect in the 2019 calendar year. For all tax years beginning on or after January 1, 2020, this act further reduces the top rate of tax by 1.55%, with an eventual top rate of tax of 3.55%. (Section 143.011)
MISSOURI WORKING FAMILY TAX CREDIT
This act establishes the Missouri Working Family Tax Credit Act.
For all tax years beginning on or after January 1, 2020, this act creates a tax credit to be applied to a taxpayer's Missouri income tax liability after all reductions for other credits for which the taxpayer is eligible have been applied. The tax credit shall not exceed the amount of the taxpayer's tax liability, and shall not be refundable. The amount of such tax credit shall be twenty percent of the amount of a taxpayer's federal earned income tax credit.
The Department of Revenue shall determine whether a taxpayer who did not apply for the tax credit established by this act is eligible and shall notify such taxpayer of his or her potential eligibility.
The Department shall prepare an annual report regarding the tax credit established by this act containing certain information as described in the act. (Section 143.177)
This provision shall sunset after six years unless reauthorized by the General Assembly.
This provision is substantially similar to SB 183 (2019), HB 291 (2019), HB 1194 (2019), SB 615 (2018), SB 197 (2017), SB 342 (2017), HCS/HB 109 (2017), and to a provision contained in HB 846 (2019), SS#2/SCS/SBs 617, 611, & 667 (2018) and HCS/HB 1605 (2016), and is similar to HB 2154 (2016), SB 1018 (2016), SB 40 (2015), SB 687 (2014), HB 1120 (2014), HB 895 (2013), HB 1606 (2012), HB 581 (2011), and HB 1915 (2010).
SALES TAXES
This act increases the state sales tax rate from 4.225% to 6.225%. (Section 144.020)
This act also places a cap of 8.775% on the combined rates of local sales taxes for any given taxing jurisdiction. Taxing jurisdictions in which the combined rate of sales taxes is in excess of such cap as of January 1, 2020, shall not be required to reduce or repeal any such taxes, but shall not be authorized to impose any new tax which shall result in a total combined rate of sales taxes in excess of the cap established in this act. (Section 32.087)
This provision is substantially similar to a provision contained in SCS/SB 149 (2019) and SS/HCS/HB 255 (2019).
EFFECTIVE DATE
This act shall become effective on January 1, 2020.
JOSHUA NORBERG