Members of the Missouri Senate Ways and Means Committee on Tuesday heard testimony on a bill to end Missouri’s corporate income tax.
Sen. Will Kraus, R-Lee’s Summit, who sponsored the bill and chairs the committee, referenced President-elect Donald Trump’s remarks about cutting taxes across the board when introducing the bill, which Kraus characterized as an economic development tool.
Missouri’s corporate income tax rate currently is at 6.25 percent. Kraus’ plan is to reduce it to 4 percent, then drop it to 2 percent and then eliminate it over three years. Kraus called the bill “an opportunity for us to let the people know that Missouri’s open for business.”
Opponents say eliminating the tax would hurt the state’s bottom line because overall tax collections are already falling short of projections.
According to the state’s non-partisan Committee on Legislative Research, the loss in revenue from phasing out the corporate tax would be much higher than Senator Kraus’ figure of $280 million over three years. The committee says the state would be out about $180 million in the first year, $351 million the second year and $516 in the third year.