JEFFERSON CITY, Mo. – Missouri’s income tax will be seeing some cuts soon. Missouri State Treasurer Eric Schmitt on Thursday released a statement, confirming that Show-Me State taxes will be cut in 2018.
Schmitt says that thanks to state revenue growth, Missouri’s highest income tax rate will drop from 6 percent to 5.9 percent for the upcoming 2018 tax filings. It will drop to 5.5 percent over the course of the next five years.
The plan also would update the state’s tax brackets, which has not been done since the 1930’s and would increase the personal deductions for individuals with a gross income below $20,000 by $500.
The new policy will also allow small business owners to deduct 5 percent of their business income from their individual filing.
The cuts come as a result of legislation the former senator championed in 2014.
“I’m proud to have led the fight for two of the largest tax cuts in state history,” Schmitt said. “This will mean more job opportunities and more take-home pay for Missourians, which will in turn help to grow our economy. While states with poor fiscal management like Illinois and Connecticut look to raise their taxes to keep government bloated, Missouri is financially empowering its citizens by letting them keep more of their hard-earned money.”
The change marks the first income tax rate reduction for Missouri taxpayers in nearly a century and was triggered last week on the final day of the fiscal year. The 2014 law had required that the cuts only go into effect if state tax revenues reached a specific threshold.
The reductions didn’t go into effect last year because they failed to meet that threshold, with revenue falling short by more than $70 million. This year, revenues grew by an estimated $229 million.
In a monthly report issued Wednesday, State Budget Director Dan Haug announced that 2017 fiscal year-to-date net general revenue collections increased 2.6 percent compared to 2016, from $8.79 billion last year to $9.02 billion this year.
Net general revenue collections for June 2017 increased by 2.5 percent compared to those for June 2016, from $650.1 million to $666.4 million.