Missouri Senate passes pared-down tax plan

2 months 18 hours 27 minutes ago Wednesday, May 16 2018 May 16, 2018 Wednesday, May 16, 2018 9:28:00 AM CDT May 16, 2018 in News
By: The Associated Press

JEFFERSON CITY (AP) - Missouri senators on Tuesday passed a stripped-down tax bill that would cut the individual income tax rate from 5.9 percent to 5.5 percent starting next year, moving the Republican-led Legislature a step closer to passing tax changes before lawmakers' Friday deadline.

Under the Senate version, individuals' income tax rate would gradually drop to 5.1 percent if the state meets revenue targets. To offset the loss in revenue, senators proposed reducing a federal income tax deduction. The proposal passed the Senate 24-9.

The version includes far fewer tax changes than a proposal approved by House members last month, which also would have cut the corporate tax rate from its current 6.25 percent to 5 percent.

Still, bill sponsor and House Speaker Pro Tem Elijah Haahr said that chamber likely will support the Senate's pared-down plan.

"If that's where we can get to this year, that's a great spot," the Springfield Republican said.

The earlier, House-approved version of the proposal also had included an earned income tax credit for low-income workers and a hike in vehicle fees. It would have changed how some multistate corporations can calculate their taxable income, and it would have eliminated a tax credit for low-income senior renters.

While the bill no longer is as wide-ranging as Haahr proposed, there are other opportunities for lawmakers to enact additional tax changes this year.

The House also is considering a Senate bill that would cut the corporate tax rate to 5.5 percent starting in 2019. It would gradually go down to 5 percent after that if the state brings in enough revenue.

Haahr said both bills could pass before lawmakers adjourn Friday evening.

Tax bills are HB 2540 and SB 674 .

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