AIM successful as tax cut for 95% of Missouri businesses sent to Gov. Mike Parson
Updated: Sep 30, 2022
by Ray McCarty, President/CEO, Associated Industries of Missouri
September 29, 2022 - The Missouri House today, led by Speaker Rob Vescovo and House Majority Floor Leader Dean Plocher, showed real leadership today in passing a historic cut in the rate of Individual Income Tax.
The cut benefits all Missouri taxpayers, including about 95% of business owners and operators that report their business income on their individual income tax returns.
The bill sponsor, Sen. Lincoln Hough, testified in support of the bill along with Associated Industries of Missouri President/CEO Ray McCarty yesterday in a six hour hearing. House Budget Chairman Cody Smith handled the bill in the House, which represented a compromise between Sen. Hough, Sen. Andrew Koenig and others in the Missouri Senate who crafted a responsible tax cut bill.
The bill will reduce the individual income tax rate from the scheduled 5.2% rate in 2023 to 4.95%. If a revenue trigger is met, the rate would go down to 4.8% in 2024, and additional triggers are put in place that could lower the rate by an additional .3% if state revenues continue to grow at a rapid rate.
Governor Mike Parson was happy with the result of the special session so far.
"We are thrilled that the General Assembly has answered our call to cut Missourians' taxes and return some of their hard-earned dollars," Governor Parson said in a release. "We called this special session to pass and extend critical support to our agriculture industry and reduce Missourians' income tax burden, and that's exactly what we are accomplishing. Today's action will provide real relief to taxpaying Missourians. Relief that is even more critical now as Missouri families face rising grocery bills, high gas prices, and record inflation. This bill means our administration will have cut Missourians' income tax rate by almost a full percentage point or a nearly 15 percent decrease. Next week, we look forward to progress being made on the agriculture bill, so we can sign both pieces of legislation into law," he said.
"Some don't understand why Associated Industries of Missouri was a leader in passing this tax cut because they don't understand that the vast majority of Missouri businesses would enjoy the tax cut," said McCarty, a veteran Missouri tax lobbyist. "The Missouri House and Missouri Senate answered Governor Mike Parson's call to use some of the current state revenue to allow Missourians to keep more of their hard-earned money by reducing taxes permanently. We applaud all of these strong leaders for working together for the good of Missouri individual taxpayers and businesses and believe this will help an economy badly damaged by flawed federal economic policies, war abroad, and uncertainty created through supply chain and workforce challenges globally," he said.
The tax cut bill also increases the personal exemption from $100 to $1,000 per taxpayer.
The bill now goes to Governor Mike Parson for his consideration.