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SCS/HCS/HB 1639 - The act creates an individual income tax deduction for business income. The amount of this deduction will increase over a five year period, if the Office of Administration determines that each year the combined corporate and individual income tax revenues from the fiscal year before that tax year were equal to or greater than the income tax revenues from FY 2010. If the combined corporate and individual income tax revenues from the fiscal year before that tax year are less than the income tax revenues from FY 2010, then the deduction will be the same percentage of business income it was in the tax year before that year. Once fully phased-in, taxpayers will be allowed a fifty percent deduction for business income for all subsequent tax years. Shareholders of S corporations and partners in partnerships will be allowed a proportional deduction based their share of ownership. (Section 143.013) This act reduces the corporate income tax rate from its current six and one-fourth percent of Missouri taxable income. This reduction will occur over a five year period, if the Office of Administration determines that each year the combined corporate and individual income tax revenues from the fiscal year before that tax year were equal to or greater than the income tax revenues from FY 2010. If the combined corporate and individual income tax revenues from the fiscal year before that tax year are less than the income tax revenues from FY 2010, then the corporate income tax rate will be the same rate it was in the tax year before that year. Once fully phased-in, taxable corporate income will be taxed at three and one-eighth percent for all subsequent tax years. (Section 143.071) This act is similar to SCS/SB 661 (2012). EMILY KALMER
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