HCS/SCS/SB 163 - This act modifies provisions relating to taxation. 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 $5,000, or, for claimants who owned and occupied the residence for the entire year, such amount is increased from $4,000 to $5,000. (Section 135.010) 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 $32,500, or $40,000 in the case of a homestead owned and occupied by a claimant for the entire year. (Section 135.030) These provisions are substantially similar to SCS/SBs 101 & 64 (2025), SB 822 (2024), SB 930 (2024), HCS/HB 1428 (2024), HB 1670 (2024), HB 1939 (2024), HB 2050 (2024), HB 666 (2023), and HCS/HB 1134 (2023), and to provisions in SS#2HCS/HBs 594 & 508 (2025), HB 1636 (2024), SS/SCS/SB 15 (2023), HCS/SS/SB 143 (2023), HCS/SB 247 (2023), and HB 1351 (2023). TAXATION BALLOT MEASURE LANGUAGE This act requires any ballot measure seeking to add, change, or modify a tax on real property to express the effect of the proposed change within the ballot language in terms of the change in dollars owed per $100,000 of a property's market valuation. (Section 137.067) This provision is identical to HB 660 (2025) and to a provision in HCS/HB 2058 (2024), HCS/HB 1517 (2024), HCS/HB 2140 (2024), CCS/HS/HCS/SS#2/SCS/SB 96 (2023), and HCS/SS#3/SCS/SB 131 (2023). LOCAL PROPERTY TAX LEVY CALCULATIONS Current law provides allows for an inflationary growth factor in assessed valuation for the purposes of calculating property tax levies, with such growth factor not to exceed the lesser of the consumer price index or five percent. This act reduces the allowable growth factor to the lesser of the consumer price index or three percent. (Section 137.073.2(4)) Additionally, current law considers any aggregate increase in valuation of personal property over the previous year as new construction and improvements for the purposes of calculating property tax levies. Beginning January 1, 2027, this act provides that such amounts shall not be considered new construction and improvements. (Section 137.073.4(2) PERSONAL PROPERTY ASSESSMENT RATE Current law requires that personal property be assessed at 33.3% of its true value in money. Beginning January 1, 2026, this act reduces such percentage to 32%. (Section 137.115.1) MOTOR VEHICLE ASSESSMENTS 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. 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. (Section 137.115.9) This provision is substantially similar to SS/SCS/SB 799 (2024), HCS/HB 1690 (2024), HB 2358 (2024), SS/SCS/SB 8 (2023), and SB 493 (2023), and to a provision in HB 2403 (2024), HCS/SS/SB 23 (2023), HCS/SS#3/SCS/SB 131 (2023), SS/SCS/SB 133 (2023), as amended, HCS/SS/SB 143 (2023), HCS/SB 247 (2023), and SCS/HCS#2/HB 713 (2023). INDIVIDUAL INCOME TAX Current law imposes a graduated income tax rate and authorizes reductions in the top rate of income tax contingent on certain state revenue collections, with an eventual top rate of 4.5%. This act provides that, for all tax years beginning on or after January 1, 2026, there shall be a flat income tax rate of either 4.7% or 4.6% on all taxable income. Beginning with the 2026 calendar year, the rate of tax may be reduced by at least 0.1%, but by no more than 1.0%, if the amount of net general revenue collections in the previous fiscal year exceeds the highest amount of such collections from any of the three previous fiscal years by at least $175 million. The eventual rate of tax if all reductions authorized by the act and by current law are made shall be 3.4% or 3.3%. (Section 143.011) This provision is identical to a provision in HCS/HB 798 (2025). COMBINED INCOME TAX RETURNS For all tax years beginning on or after January 1, 2026, this act provides that there shall be one column for the calculation of total Missouri combined adjusted gross income on the Missouri income tax return for combined returns. (Section 143.031) This provision is identical to a provision in HCS/HB 798 (2025). CAPITAL GAINS INCOME TAX DEDUCTION For all tax years beginning on or after January 1, 2025, this act authorizes an income tax deduction for one hundred percent of all income reported as a capital gain for federal income tax purposes. (Section 143.121) This provision is identical to SB 46 (2025) and to a provision in HCS/HB 798 (2025), and is substantially similar to a provision in SS#2/HCS/HBs 594 & 508 (2025). INDIVIDUAL INCOME TAX STANDARD DEDUCTION Current law provides that the Missouri standard deduction shall be equal to the federal standard deduction. For all tax years beginning on or after January 1, 2026, this act provides that the Missouri standard deduction shall be equal to the federal standard deduction plus $4,000. (Section 143.131) This provision is identical to a provision in HCS/HB 798 (2025). NATIONAL GUARD INCOME TAX DEDUCTION Current law authorizes an income tax deduction for salary earned as compensation for certain duties performed for the National Guard. For all tax years beginning on or after January 1, 2026, this act adds performance of state-funded military orders of the National Guard, commonly known as state active duty (SAD) or state emergency duty (SED), to such eligible duties. (Section 143.175) EARNED INCOME TAX CREDIT Current law authorizes an income tax credit in an amount equal to a percentage of the taxpayer's federal earned income tax credit. This act repeals such tax credit. (Section 143.177) This provision is identical to a provision in HCS/HB 798 (2025). DEFICIENCIES DUE TO DENIED TAX CREDITS This act provides that a taxpayer shall not be liable for penalties or interest on an income tax balance due if such taxpayer is denied part or all of a tax credit to which the taxpayer has qualified pursuant to any provision of law due to lack of available funds, and such denial causes a balance-due notice to be generated by the Department of Revenue or any other redeeming agency. Such taxpayer shall pay the balance due within sixty days or be subject to penalties and interest pursuant to current law. (Section 143.512) This provision is identical to a provision in HCS/SS/SB 67 (2025). JOSH NORBERG