As Missouri lawmakers take time to consider the state’s proposed operating budget for the upcoming fiscal year, I had the opportunity to present Senate Bill 939 to the Missouri Senate’s Ways and Means Committee.
Senate Bill 939 is a revenue neutral proposal that would put approximately $800 million back into the pockets of Missouri’s citizens and businesses. If passed, this bill would serve as a bold, but responsible tax reform policy for our state.
I believe now is the time to cut taxes for Missouri families and businesses without negatively impacting our state’s bottom line. Senate Bill 939 is revenue-neutral, which allows our state to cut taxes while bringing in new revenue from areas we have not seen in the past.
In addition, the bill reduces personal income tax by more than 10 percent and reduces the corporate income tax rate by 30 percent, which lowers it from 6.25 percent to 4.25 percent. The corporate tax reduction will make Missouri a very attractive place to locate a business. Furthermore, the bill phases out the federal income tax deduction, eliminates the timely filing discount and the bill establishes the Missouri Working Family Tax Credit Act.
Businesses and corporations would also shift from being subjected to the current three-factor (property, payroll and sales) apportionment methods to utilizing the single sales factor. Under the current three-factor apportionment method, corporations who produce and/or sell goods and services in more than one state are required to pay taxes on a portion of its profits to each individual state. Under my proposal, the state would focus on only collecting the sales tax – a method many states already use.
It is important to note, the components of this bill have been balanced, so even with the loss of tax incentives in specific areas, Missourians can still benefit from much needed tax reform. In addition, Senate Bill 939 works to shift our state’s budget reliance away from personal income tax and more towards the collection of sales taxes.
Ultimately, I believe this tax reform proposal allows Missouri families of all socioeconomic backgrounds to have more money to spend on everyday expenses while also creating a more attractive environment for businesses and job creators looking to grow and expand their operations.
As this bill and other legislative proposals move through the legislative process, you can track them by visiting the Senate Calendar. For information about committees or sponsored legislation for the 2018 session, please visit my official Missouri Senate website at senate.mo.gov/Cierpiot. If you have any questions, please feel free to contact my office in Jefferson City at (573)751-1464.