On Thursday, September 29, the Missouri House of Representatives picked up and debated Senate Bill 3 & 5 and passed the bill by a vote of 98-32. The House abandoned its attempt to cut the state’s Corporate income tax rate after Governor Parson signaled his opposition.  

The Governor issued a modified special session call to align the session with the Senate bill. The bill cuts income taxes as follows:

• The bill reduces the top tax rate to 4.95 percent from the current 5.3 percent
• If general revenue grows by $175 million or more in the next year the rate will decrease to 4.8 percent
• The bill has three additional 0.1 percent decreases to a ceiling of 4.5 percent if general revenue grows by $200 million adjusted for CPI.

The bill when fully implemented will reduce general revenue by $764 million. The tax cut will take effect in early 2023.  

The Senate next week will take up a House-passed bill providing tax credits and other incentives for economic projects in rural areas. If taken up and passed, House Bill 3 will be sent to the Governor’s desk and the special session will be completed.

Emergency clauses on both the Senate and House bills failed to pass in the House, so both bills would take effect 90 days after adjournment of the special session.