January 13, 2015

Missouri

State & Local Taxes in 2015

 

Missouri Tax Code Features

Progressive Features

• Graduated personal income tax structure

Regressive Features

• Provides an income tax deduction for federal income taxes paid

• State sales tax base includes groceries, though taxed at a lower rate

• Local sales tax bases include groceries

• Fails to provide non-elderly taxpayers with refundable income tax credits to offset sales, excise, and property taxes

• Fails to use combined reporting as part of its corporate income tax

Tax Changes Enacted in 2013 & 2014

• Reduced top personal income tax rate from 6 to 5.5 percent and created new 25 percent exemption for pass- thru business income starting in 2017 dependent on revenue growth (these changes are modeled in an alternative MO analysis found in App. D)

• Personal exemption increased for low-income taxpayers

ITEP Tax Inequality Index

According to ITEP’s Tax Inequality Index, Missouri has the 30th most unfair state and local tax system in the country. States with regressive tax struc­tures have negative tax inequality indexes, meaning that incomes are less equal in those states after state and local taxes than before (See Appendix B for state-by-state rankings and more details).

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