The Missouri State Senate Tuesday gave final passage to a bill that would cut taxes for the 94 percent of businesses that report as individuals on their income taxes.
By a 23-9 margin, the Senate third read and passed Senate Bill 509, sponsored by Sen. Will Kraus (R-Lee’s Summit). Kraus’ bill would phase in a tax cut in five steps starting in the 2017 tax year.
The Senate legislation would gradually cut the top individual income tax rate to 5.5 percent from the current 6 percent and phase in a 25 percent deduction for business income reported on personal tax returns. Those tax cuts would occur only if state revenues grow by at least $150 million over the high mark of the previous three years.
The bill also would provide an additional $500 tax deduction on top of the state’s current $2,100 deduction for residents with incomes below $20,000.
Supporters of the bill said on several occasions during floor debate that SB 509 was not the perfect tax cut bill, but it does serve to get a tax cutting piece of legislation moving through the legislature.
“While we are disappointed that the tax rate cut is not as much as we would have liked, and that our state’s corporations were left out of this plan entirely, we are grateful to Senators Kraus and Schmitt that they were able to get this piece of legislation to the finish line in the Senate,” said Ray McCarty, president of Associated Industries of Missouri. “We call now on the House to move quickly to send this legislation to Governor Nixon, so we can enact meaningful business tax reductions.”
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