On Aug. 22, Gov. Mike Parson (R) announced his call for a special session for permanent state income tax cuts and the extensions of several agriculture tax credit programs for a minimum of six years. The General Assembly will meet in Jefferson City on Tuesday, Sept. 6, at 12 noon to begin consideration of Governor Parson's proposed legislation. The Special Session will have one bill with numerous subject matters relating to taxation and the bill debate is set to begin in the Missouri Senate.

The special session likely will overlap with the General Assembly’s annual veto session, scheduled to begin on Sept. 14. The special session is the result of Governor Parson vetoing House Bill 1720 and House Bill 2090, bills passed in May that dealt with tax credits and state tax refunds. The Governor’s veto centered around how the bills were drafted and not the subject matter and thus he has asked for the legislature to return and pass a bill with the needed modifications. 

The Governor’s proposed tax plan includes reducing the individual income tax rate, increasing the standard deduction, and further simplifying the tax code. The proposed plan includes:

• Reducing the top individual income tax rate from 5.3 to 4.8 percent, a nearly 10 percent cut;
• Increasing the standard deduction for individuals by $2,000 and by $4,000 for married joint filers; and
• Eliminating the bottom income tax bracket ($16,000 for single filers, $32,000 for married joint filers).

The Governor said the tax relief plan would mean significant savings of an estimated $700 million for Missourians each year. Below are a few scenarios that estimate state income tax savings for Missourians of different backgrounds, based on the state's tax structure:

• A senior citizen making $20,000 per year - 100 percent decrease in tax liability;
• Single adult making $25,000 per year - 32 percent decrease in tax liability;
• Single mom with two kids making $35,000 per year - 21 percent decrease in tax liability; and
• Married couple making $125,000 per year - 11 percent decrease in tax liability. 

The special session call also includes the extension and creation of several agriculture tax credit programs intended to help develop key areas of Missouri's agricultural industry, the state's top economic driver. The sunset for each program will be for a minimum of six years. The call includes:

• Extending the expiration of the meat processing facility investment tax credit;
• Creating a tax credit program for retail dealers of higher ethanol blend fuels;
• Creating a tax credit program for retail dealers of biodiesel;
• Creating a tax credit program for Missouri biodiesel producers;
• Creating a tax credit program for establishing or improving urban farming operations;
• Extending the expiration of the Rolling Stock Tax Credit program;
• Extending the expiration of the Agricultural Product Utilization Contributor Tax Credit;
• Extending the expiration of the New Generation Cooperative Incentive Tax Credit;
• Exempting utility vehicles for agriculture use from state and local sales and use taxes;
• Creating the Specialty Agricultural Crops Act; and
• Amending the Family Farms Act to modify the definition of small farmer.

For more information and to see the specific call language, click here. 

In addition, the Governor’s call included the confirmation of all nominees submitted to the Missouri Senate since its adjournment from its regular legislative session mid-May.