Gov. Mike Parson is scheduled to sign a bill Thursday that will lower Missouri’s individual income tax rate.
The rate will be reduced from 5.9 percent to 5.5 percent beginning Jan. 1.
Under the bill, if the state meets particular revenue targets, the rate would be further reduced, in increments, to 5.1 percent. In exchange for the expected revenue loss, a federal income tax deduction will be phased out.
When fully implemented by 2023, analysts say the cuts will result in an estimated $5.8 million less in state revenue.
The bill is sponsored by state Rep. Elijah Haahr, R-Springfield. Next year, Haahr will take on the role of speaker of the House.
Parson is scheduled to sign House Bill 2540 Thursday afternoon in Springfield.
Other significant tax developments of the Missouri Legislature’s 2018 session included a corporate tax rate reduction from 6.25 percent to 4 percent, effective in 2020, and a ballot measure relating to the state’s gas tax. Under the ballot measure, Missourians will vote on whether to increase the gas tax from 17 to 27 cents per gallon over five years to raise money to repair infrastructure.
Read more: St. Louis Post-Dispatch