Washington University Professor: SB 509 Would Eliminate Income Tax on Those Making More Than $9,000
In what can be classified as a "drafting error"in the latest tax cut legislation to be passed by the Missouri General Assembly, a Washington University Corporate Tax Professor has provided a legal analysis of SB 509 and found that the bill, as written, would effectively eliminate income taxes on any tax payer making more than $9,000 per year.
This provision was not found or was ignored during the General Assembly's consideration and eventual passage of SB 509. At the time of SB 509's passage last week, legislators believed that SB 509 was limited to doing the following...
Beginning in 2017, Missouri:
- Cut the top individual income tax rate from 6 percent to 5.5 percent.
- The reduction in the top rate of income tax relies on the amount of state general revenue received in the prior fiscal year exceeding the amount of net general revenue in any of the three previous fiscal years by $150 million.
- Create a new business income deduction of 25 percent for those business that file through the individual income tax structure.
- Create an increase of $500 in the personal exemption for Missourians with incomes under $20,000 per year.
- Require that the individual income tax brackets be updated annually for inflation.
The fiscal estimate associated with SB 509 ranged anywhere between $600 and $800 million annually. However, with the latest revelation about the elimination of the income tax, Governor Jay Nixon announced that this drafting error would cost Missouri's state budget nearly $5 billion in revenue each year if SB 509 becomes law.
If you would like more information on this latest development in the debate surrounding SB 509, you may view the latest information coming from the Governor's Office here.
Posted on Tue, April 22, 2014