Following up on the Senate tax bills (SB611 and SB617) up for consideration this session, Gov. Eric Greitens rolled out his own version of a tax cut plan earlier this month. However, the plan has been met with skepticism and a lot of questions.
The Associated Press reported that businesses would actually end up shouldering the cost of the cuts, even though there would be a corporate and income tax rate decrease. Under Gov. Greitens’ plan, individual income tax would be lowered to 5.3 percent from 5.9 percent for most state residents and the corporate rate would drop to 4.25 percent from 6.25 percent. To pay for these cuts, tax deductions and incentives used by the business community would be cut. This includes eliminating the discount for businesses that file their withholding and sales taxes on time, as well as the state deduction for what corporations owe in federal taxes.
Some lawmakers, however, have expressed doubt that the plan is actually revenue-neutral, and there appear to be discrepancies between the cost estimates provided by the Department of Revenue and the Division of Budget and Planning. The Missouri Retailers Association testified against the bill.
At this point, NFIB/MO cannot endorse the plan because it removes the 2 percent collection allowance that is taken by every business in the state that collects sales tax and it is unclear whether the income tax cut would actually be enough to offset this.