House Committee Substitute

SENIOR CITIZEN PROPERTY TAX CREDIT

Current law authorizes an income tax credit for certain senior citizens and disabled veterans in amount equal to a portion of such taxpayer's property tax liabilities, with the amount of the credit dependent on the taxpayer's income and property tax liability. This act modifies the definition of "income" to increase the amount deducted from Missouri adjusted gross income from $2,000 to $2,800, or, for claimants who owned and occupied the residence for the entire year, such amount is increased from $4,000 to $5,800. (Section 135.010

The maximum allowable credit under current law is limited to $750 in rent constituting property taxes actually paid or $1,100 in actual property tax paid. This act increases such amounts to $1,055 and $1,550, respectively, and annually adjusts such maximum amounts for inflation. (Section 135.025)

Additionally, current law limits the tax credit to qualifying taxpayers with an income of $27,500 or less, or $30,000 in the case of a homestead owned and occupied by a claimant for the entire year. This act increases such maximum income to $38,200, or $42,200 in the case of a homestead owned and occupied by a claimant for the entire year, and annually adjusts both amounts for inflation. (Section 135.030)

These provisions are substantially similar to provisions in SS/SCS/SB 15 (2023).

ASSESSMENT OF MOTOR VEHICLES

Current law requires assessors to use the trade-in value published in the October issue of the National Automobile Dealers' Association Official Used Car Guide to determine the true value of motor vehicles for the purposes of property tax assessments. For the 2023 tax year, this act requires the State Tax Commission to require an assessor to use such publication or the Kelley Blue Book, Edmunds, or another similar publication, and allows the assessor to use the current or any of the three immediately previous years' October issue of such publication.

For all tax years beginning on or after January 1, 2024, this act requires assessors to use the manufacturer's suggested retail price as depreciated using a ten year depreciation table provided in the act. When the manufacturer's suggested retail price data is not available from an approved source or the assessor deems it not appropriate for a vehicle, the assessor may obtain a manufacturer's suggested retail price from a source that he or she deems reliable and shall apply the depreciation schedule provided by the act.

This provision contains an emergency clause.

This provision is substantially similar to SB 493 (2023) and HCS#2/HB 713 (2023), and is similar to SS/SCS/SB 8 (2023).

MOTOR FUEL TAX REFUNDS

Current law authorizes refunds for purchases of motor fuel used for tax-exempt purposes. Beginning October 1, 2023, this act authorizes a taxpayer to submit appropriate documentation to an entity exempt from taxation for federal purposes under Section 501(c)(3) of the federal tax code and authorizes such entity to claim the taxpayer's refund. Additionally, the taxpayer may deduct the amount of such refund from the taxpayer's Missouri adjusted gross income.

Current law requires motor fuel tax refunds that are issued for motor fuel tax charged in excess of $0.17/gallon to be issued on a fiscal year basis. This act provides that, beginning with the 2024 fiscal year, such refunds shall be issued on a tax year basis. The act allows a taxpayer to claim such refund based on itemized receipts retained by the taxpayer, with the amount of such refund equal to the amount of motor fuel tax paid by the taxpayer during the tax year. Alternatively, the taxpayer may claim a standard refund in an amount equal to $30 for the 2023 tax year, and increasing to $75 for all tax years beginning on or after January 1, 2026, as described in the act. Such refund shall be submitted on a form with the taxpayer's income tax return and shall have such refund applied to the taxpayer's income tax liability.

Current law provides that the exemption and refund of motor fuel tax charged in excess of $0.17/gallon shall only be available for motor vehicles with a gross weight of 26,000 pounds or less. This act authorizes such exemption and refund for motor vehicles that exceed such weight if the motor vehicle is owned by a corporation licensed in Missouri with its primary headquarters in this state, or owned by a sole proprietor whose home office is located in this state.

This act requires the Department of Revenue to develop a mobile application that allows motor fuel tax refund claims to be submitted on a person's phone at the time of motor fuel purchase in lieu of the procedures authorized by the act. (Sections 142.815 to 142.824)

These provisions are identical to HB 519 (2023).

INDIVIDUAL INCOME TAX RATE

Current law provides that the top rate of income tax is 4.95%, with additional potential reductions conditional on meeting certain revenue triggers, for an eventual top rate of 4.5%. Beginning with the 2024 calendar year, this act reduces the top rate of tax to 4.5% and maintains the additional potential reductions in current law, for an eventual top rate of 4.05%. (Section 143.011)

This provision is identical to a provision in HCS/SS#2/SCS/SB 96 (2023) and HCS/HBs 816 & 660 (2023).

CORPORATE INCOME TAXES

Current law authorizes an income tax deduction for a percentage of a taxpayer's business deduction from certain combined sources. This act adds the total combined profit as reported on an IRS Schedule F form and Form 4835. (Section 143.022)

This provision is identical to a provision in HS/HCS/HB 356 (2023).

Current law levies a tax on the Missouri taxable income of corporations at a rate of 4.0%. For all tax years beginning on or after January 1, 2024, this act reduces such rate to 2.0%. Additionally, beginning in the 2026 calendar year, the corporate income tax rate shall be reduced to 1.0% if in any fiscal year after the 2024 fiscal year the amount of net corporate income tax revenue collected exceeds the amount collected during the 2024 fiscal year by at least $50 million. Finally, beginning in the calendar year following the calendar year in which the rate of tax is reduced to 1.0%, the corporate income tax rate may be reduced to 0% if during any fiscal year the amount of net general revenue collected during the immediately preceding fiscal year exceeds the amount of net general revenue collected during the fiscal year in which the rate of tax was reduced to 1.0% by at least $250 million.

For all tax years beginning after the fiscal year in which the corporate income tax is eliminated, no corporate income tax credits shall be claimed in any tax years in which there is no tax imposed on the Missouri taxable income of corporations. (Section 143.071)

This provision is identical to a provision in HCS/SS#2/SCS/SB 96 (2023) and HCS/HBs 816 & 660 (2023).

ESOP INCOME TAX DEDUCTION

Current law authorizes an income tax deduction equal to 50% of the net capital gain from selling employer securities to a qualified Missouri employee stock ownership plan, with such deduction scheduled to sunset on December 31, 2022. This act repeals the sunset provision. (Section 143.114)

This provision is identical to a provision in SB 247 (2023) and HS/HCS/HB 356 (2023), and is similar to a provision in HCS/SS/SB 807 (2022) and HCS/SS/SCS/SB 931 (2022).

RETIREMENT BENEFITS DEDUCTION

Current law authorizes a taxpayer to deduct a maximum of the first $6,000 of any retirement allowance received from any privately funded sources if the taxpayer's Missouri adjusted gross income is less than $16,000 if filing married separately, $25,000 if filing single, or $32,000 if filing married combined. For all tax years beginning on or after January 1, 2024, this act increases such deduction to $12,000 and increases the income thresholds to $32,000, $50,000, and $64,000 respectively. (Section 143.124)

Current law allows taxpayers with certain filing status and adjusted gross income below certain thresholds to deduct 100% of Social Security retirement and disability benefits from the taxpayer's Missouri adjusted gross income, with a reduced deduction as the taxpayer's adjusted gross income increases. For all tax years beginning on or after January 1, 2024, this act allows the maximum deduction to all taxpayers regardless of filing status or adjusted gross income and allows the deduction to be taken for Social Security retirement, disability, survivors, and supplemental benefits. (Section 143.125)

This provision is identical to a provision in HCS/HBs 816 & 660 (2023) and HCS/SS#2/SCS/SB 96 (2023), and is substantially similar to a provision in SB 241 (2023), SB 247 (2023), SB 448 (2023), SB 585 (2023), SB 871 (2022), HB 2853 (2022), SB 157 (2021), SB 847 (2020), and HB 1725 (2020).

UNBORN CHILD DEDUCTION

Current law authorizes a taxpayer to claim a $1,200 exemption for each dependent for whom such taxpayer is entitled to a dependency exemption for federal tax purposes, provided such federal exemption is not equal to $0. This act authorizes a taxpayer to claim a $2,400 exemption during the tax year in which a taxpayer gives birth to a child for which the taxpayer is entitled to a dependency exemption for federal tax purposes, regardless of whether the federal exemption is equal to $0. (Section 143.161)

This act is substantially similar to SB 12 (2022 First Extraordinary Session).

DOGS

Current law provides that a dog shall not be permitted in the state unless the owner has paid a dog tax. This act repeals such provision. (Section 273.050)

This provision is identical to a provision in HS/HCS/HB 356 (2023).

JOSH NORBERG