Newspaper article St Louis Post-Dispatch (MO)

In Missouri, Tax Cuts Are on the Way

Newspaper article St Louis Post-Dispatch (MO)

In Missouri, Tax Cuts Are on the Way

Article excerpt

JEFFERSON CITY * While Illinois residents face the prospect of paying higher income taxes to finance state government programs, Missouri's tax rates are poised to head downward.

As part of a 2014 law approved by Missouri's Republican-led Legislature, the state's top personal income tax rate is positioned to drop to 5.9 percent from its current 6 percent beginning with taxes paid in 2018. It will drop to 5.5 percent over the next five years. There also will be a new 25 percent deduction on business income reported on individual returns.

The plan also would update the state's tax brackets, which haven't been changed since 1931, and increase by $500 the personal deduction for individuals with gross income below $20,000.

By contrast, Illinois residents could see higher tax rates as part of a deal designed to get a budget on the books for the first time in two years. The change would hike the individual income tax rate from 3.75 percent to 4.95 percent and the corporate income tax rate from 5.25 percent to 7 percent.

In Missouri, the decrease appears to have been triggered on Friday, the final day of the state's fiscal year. As part of the 2014 law, the cuts would only go into effect if state tax revenues reached a specific threshold.

Last year, the tax rate reductions did not go into effect because revenue fell short by more than $70 million. This year, revenues grew by an estimated $229 million, triggering the cuts, which will remain in place regardless of future fluctuations in state revenue.

The governor's budget office would not confirm Monday that the threshold was met, citing the long July Fourth holiday weekend.

"Since the fiscal year ended Friday, we are starting our tabulations today, but with the holiday tomorrow we won't have them finalized until Wednesday," said Ryan Burns, spokeswoman for the Office of Administration.

But Rep. Scott Fitzpatrick, chairman of the House Budget Committee, said the final week of the fiscal year showed robust growth in revenues.

"We had a really strong last few days," said Fitzpatrick, R-Shell Knob. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.