Senate gives first-round approval to a tax cut bill
In a surprising move, the Missouri Senate this evening passed a tax cut bill that benefits all except corporations in Missouri.
Senator Will Kraus (R-8, Lee’s Summit) offered a third substitute for his tax bill, SS#3 SCS SB 509 & 496. The bill is a combination of Senator Kraus’ original bill and a bill filed by Senator Eric Schmitt (R-15, Kirkwood).
The bill would not begin reducing taxes until tax year 2017, and then would only reduce taxes if net general revenue collected in the previous fiscal year exceeds the highest amount of revenue collected over the previous three fiscal years by at least $150 million.
Each step of individual income tax reduction would be one-tenth of one percent. The maximum reduction would be one-half percent after five years of meeting the $150 million increase “trigger”.
The bill would also allow the 94% of businesses that are organized as S Corporations, LLC’s, LLP’s, sole proprietorships, partnerships, and other flow-through type entities a 5% business income deduction the first year the trigger is met. For each subsequent year the trigger is met, the business income deduction would increase by an additional 5% to a maximum of 25%.
The bill would also provide an additional $500 personal deduction for individuals making less than $20,000. Spouses would also be entitled to a $500 deduction if their income is less than $20,000.
The bill does not provide any tax relief to corporations in Missouri.
The bill was perfected, meaning it will face one additional vote before advancing to the Missouri House.