The Latest: Missouri Senate passes corporate tax cut

1 month 1 week 32 minutes ago Friday, May 18 2018 May 18, 2018 Friday, May 18, 2018 4:57:00 AM CDT May 18, 2018 in News
By: The Associated Press

JEFFERSON CITY (AP) — The Latest on Missouri lawmakers' work on tax policy (all times local):

11:30 p.m.

The Missouri Senate has passed a bill to cut the corporate income tax rate from 6.25 percent to 4 percent.

Senators voted 23-9 in favor of the proposal late Thursday, just hours before the 6 p.m. Friday deadline to pass bills.

The 2.25 percent tax cut for businesses would take effect in January 2020 if made law. To offset the revenue loss, the proposal would change how multistate corporations can calculate their taxable income.

The measure needs another vote of approval in the House to pass.

The Republican-led Legislature earlier Thursday also passed a bill to cut the current 5.9 percent individual income tax rate for most Missourians to 5.5 percent in January 2019.

Individuals' income tax rate would gradually drop to 5.1 percent if the state meets revenue targets. Federal tax deductions would be scaled back to make up for the loss in revenue.

___

8:15 p.m.

Missouri lawmakers have passed an income tax cut for most Missourians.

House lawmakers voted 101-40 Thursday to give the measure final approval. If enacted, the bill would cut the top individual income tax rate from 5.9 percent to 5.5 percent in January 2019.

Individuals' income tax rate would gradually drop to 5.1 percent if the state meets revenue targets. Federal tax deductions would be scaled back to make up for the loss in revenue.

Fiscal estimates would put the price tag at $5.8 million once the measure is fully implemented in fiscal year 2023.

Still pending is a proposed corporate income tax rate cut from 6.25 percent to 3.9 percent. Lawmakers face a Friday deadline to pass legislation.

___

4 p.m.

Missouri lawmakers in a last-minute scramble are trying to cut corporate income taxes without blowing an estimated $52 million hole in the state budget.

At issue is a Senate tax plan to cut the corporate tax rate from 6.25 percent to 3.5 percent. To offset the revenue loss, the proposal would change how businesses can calculate their taxable income.

Earlier estimates projected the changes would mean close to $10 million more in revenue by fiscal year 2020.

But House Budget Committee Chairman Scott Fitzpatrick on Thursday said the Revenue Department made a $60 million mistake in its calculations. Revised estimates put the cost at more than $52 million.

The House instead voted for a 3.9 percent corporate tax rate Thursday, which Fitzpatrick said could cost as much as $15.4 million.

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