Gov. Eric Greitens says his tax plan will result in a 97 percent tax cut for all Missouri taxpayers, eliminate tax burden for many in the working-class and encourage new businesses to open in Missouri.
In order to accomplish these goals, Gov. Greitens has made several changes that could affect Missourians and their businesses. The seven core changes made in the plan are outlined below.
1.Reduce the Personal Income Tax Rate The plan cuts the top personal income tax rate from 5.9 percent to 5.3 percent. Missourians who earn more than $9,072 annually are in the top income tax bracket. These Missourians will see a tax rate reduction of 10 percent.
2.Implement the Workers First Tax Cut This is a non-refundable tax credit for lower-income workers. The number of children and amount of income earned is taken into account. Those who are eligible for the Earned Income Tax Credit would also get 20 percent of their federal EITC off of their state tax bill.
3.Lower Corporate Tax Rates Lowering the corporate tax rate from 6.25 percent to 4.25 percent would give Missouri the second lowest corporate income tax in the nation. Gov. Greitens says this will encourage businesses to invest in Missouri and stop the state from losing jobs.
4.Eliminate Timely Filing Discounts Missouri businesses receive a 2 percent discount for filing their sales taxes on time. The Withholding Tax Timely Filing Discount and the Vendor Timely Filing Discount will be eliminated under his plan.
5.Require Single Sales Factor Under this tax plan, all multi-state businesses will be required to use single-factor-apportionment rather than have the choice between this, three-factor apportionment or a modified single factor apportionment. Gov. Greitens says three-factor apportionment encourages businesses to hire workers outside of Missouri and pay less in Missouri taxes.
6.Phase out Federal Income Tax Deductions Gov. Greitens’ plans to alter federal individual income tax deductions by phasing out the amount of deduction as your income increases.
7.Join the Streamlined Sales and Use Tax Agreement Every state that collects sales and use tax is prohibited from collecting use tax from remote sellers. The Streamlines Sales and Use Tax Agreement is a multi-state agreement that “encourages remote sellers selling over the internet and by mail order to collect tax on sales to customers living in the Streamlined states.”