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WeVote Research Nonpartisan
Bill Summary · HB 1793

Overview

  • Bill: HB 1793
  • Session: 2026
  • Jurisdiction: Missouri
  • Purpose: Modify and expand exemptions from earnings tax, with a focus on exempting low-income taxpayers (defined as up to 150% of the federal poverty level) from city earnings tax.

Main purpose and intent

  • The bill aims to exempt from the city earnings tax all taxpayers whose income is at or below 150% of the federal poverty level.
  • It preserves and enumerates a broad set of existing tax-exemption categories, while clarifying that certain types of income and entities are exempt from earning tax under Missouri law.

Key provisions

  1. Repeal and replacement of Section 92.130

    • The bill repeals current Section 92.130 and enacts a new Section 92.130 that governs exemptions from earnings tax.

  2. Expanded and clarified exemptions (general framework)

    • The section lists numerous categories of income or organizations whose income is not taxable under any city earnings tax ordinance enacted under sections 92.110 to 92.200. These include a wide range of nonprofit and government-related entities (e.g., religious, charitable, educational organizations; mutual associations; credit unions; certain fraternal organizations; civic leagues; clubs; farmers’ mutuals; trusts and retirement plans; rail/insurance/tax-exempt entities; etc.).
    • Several specific entities and types of income continue to be exempt, such as life insurance proceeds, workers’ compensation, gifts/intangible property, interest on government obligations, and income from certain public utilities or government functions, among others.
    • A notable inclusion remains: certain trust arrangements (employer-employee stock bonus plans, pension or profit-sharing plans, and certain restricted retirement funds) are exempt to the extent described.

  3. Targeted exemption for low-income individuals

    • A new subsection specifies that all citizens who are low-income taxpayers (defined as individuals with income at or below 150% of the federal poverty level as defined under section 208.750) shall be exempt from the earnings tax on their wages, salaries, commissions, and other compensation.

  4. Scope of exempt income

    • The bill specifies several categories of income that are exempt regardless of recipient (including life insurance proceeds, return of premiums, workers’ compensation and related damages, income from gifts/bequests, interest on state or political subdivision obligations, and certain public utility-related income).

Who or what would be affected

  • Individual wage earners and compensation recipients:
    • Individuals with income at or below 150% of the federal poverty level would be exempt from city earnings tax on their earnings (salaries, wages, commissions, etc.).
  • Employers and payroll:
    • Employers would be affected insofar as payrolls for eligible low-income employees would no longer owe earnings tax withholding for those employees (subject to any applicable administrative implementation).
  • Organizations and entities:
    • Entities listed in the exemption provisions (religious, charitable, educational, mutual benefit, and similar organizations) would continue to be exempt from city earnings tax on income derived from activities within the listed categories.
  • Government and public utilities:
    • Income from public utilities and government-related activities would remain exempt as currently outlined.

Procedural and timeline aspects

  • Status: Referred to Emerging Issues (H) as of May 15, 2026.
  • History:
    • Read Second Time: January 8, 2026
    • Read First Time: January 7, 2026
    • Prefiled: December 1, 2025
  • Next steps: If advanced, the bill would proceed through committee review, potential amendments, and floor votes in the Missouri House, followed by consideration in the Senate.

Notable details

  • The bill aligns with prior proposals (similar to HB 115 from 2025) and maintains a comprehensive list of existing exemptions while introducing the 150% federal poverty level threshold for broader income tax relief.
  • The text emphasizes “not taxable under any tax ordinance enacted pursuant to the provisions of sections 92.110 to 92.200” for many exemptions, indicating a broad, city-level application subject to local tax ordinances.

If you’d like, I can provide a plain-language impact scenario (e.g., how much tax relief a hypothetical city would see under various income distributions) or compare this bill to HB 115 from 2025 for context.

Compiled from official sources — confirm details with the bill’s official record.

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