Vote Smart's Synopsis:

Vote to pass a bill that reduces income and corporate tax rates, increases the sales tax rate, and amends tax deduction laws.

Highlights:

• Increases the state sales and use tax from 4 percent to the following (Sec. A):
• 4.1 percent during the calendar year 2014;
• 4.2 percent during the calendar year 2015;
• 4.3 percent during the calendar year 2016;
• 4.4 percent during the calendar year 2017; and
• 4.5 percent during the calendar year 2018, and all following calendar years.

• Reduces the corporate income tax rate from 6.25 percent to the following (Sec. A):
• 6.1 percent for tax years beginning January 1, 2014;
• 5.95 percent for tax years beginning January 1, 2015;
• 5.8 percent for tax years beginning January 1, 2016;
• 5.65 percent for tax years beginning January 1, 2017; and
• 5.5 percent for tax years beginning January 1, 2018 and all following tax years.

• Exempts the first $25,000 of corporate income from the corporate income tax (Sec. A).

• Reduces state individual income tax rates and tax brackets including, but not limited to, the following (Sec. A):
• 6 percent on taxable income greater than $9,000 plus $315, for the year ending December 31, 2013;
• 5.85 percent on taxable income greater than $8,700 plus $299, beginning January 1, 2014;
• 5.7 percent on taxable income greater than $8,400 plus $282, beginning January 1, 2015;
• 5.55 percent on taxable income greater than $8,100 plus $266, beginning January 1, 2016;
• 5.4 percent on taxable income greater than $7,900 plus $255; beginning January 1, 2017; and
• 5.25 percent on taxable income greater than $7,600 plus $243, beginning January 1, 2018.

• Authorizes an individual with an adjusted gross income of less than $20,000 to deduct $2,000 in addition to the existing $2,100 deduction on personal income taxes for all tax years beginning January 1, 2014 (Sec. A).

• Authorizes an individual to deduct a percentage of his or her business income from the federal adjusted gross income when determining the Missouri adjusted gross income as follows (Sec. A):
• 10 percent of business income for the tax year beginning January 1, 2014;
• 20 percent of business income for the tax year beginning January 1, 2015;
• 30 percent of business income for the tax year beginning January 1, 2016;
• 40 percent of business income for the tax year beginning January 1, 2017; and
• 50 percent of business income for the tax year beginning January 1, 2018 and all following tax years.

• Authorizes shareholders of small corporations and partners in partnerships to claim his or her share of ownership as a business income tax deduction (Sec. A).

• Specifies that the conditions a vendor is considered to be conducting business activities within the state include, but are not limited to, the following conditions (Sec. A):
• The vendor is referred potential customers through a link on the internet, a telemarketer, or an in-person presentation; and
• The vendor had gross sales of over $10,000 during the previous 12 months to Missouri residents.  

Full Bill Text