Press "Enter" to skip to content

Tax Day, take two: How state and federal cuts are affecting revenue

JEFFERSON CITY, Mo. – As tax reform measures are enacted and continue being debated in the Missouri State Legislature, Missouri citizens who procrastinated on filing their yearly taxes quickly received a break when the Internal Revenue Service issued a one-day extension due to outages for the federal website.

Now, last-minute filers have until midnight on Wednesday, April 18, to file.

Meanwhile, U.S. Senator Roy Blunt spoke about the positive impacts the new Tax Cut and Jobs Act is having on Missouri communities. He discussed how the law is helping to boost local economies by allowing families to keep more of what they earn, as well as the establishing the Opportunity Zones program to increase investments in economically distressed areas.

But the effect of the new law, as well as the state of Missouri’s tax revenues, has been on the minds of many, particularly as the House and Senate work on tax reform legislation of their own.

The effect of the new federal and state tax cuts is expected to cut the income by about $109 million by the end of the current fiscal year, or by roughly $218 million for the entire 2018 calendar year. The $218 million estimate is made up of a combination of roughly $160 million from the 2014 state tax cuts, as well as the roughly $58 million from the federal tax cuts.

According to Americans for Tax Reform, at least 34 Missouri businesses and corporations operating in the state have stated that part of their tax cut savings will go toward employee raises.

As for the effect on state incomes, according to numbers released by the Missouri Office of Administration, the state’s general revenue income in March dropped by about 0.9 percent compared to one year ago, a side-effect of the state’s business tax cuts stemming from 2014.

That being said, the income tax collections seem to growing, with an increase of more than 10 percent from one year ago. In terms of numbers for the overall fiscal year, revenue income is up 3.8 percent.