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WeVote Research Nonpartisan
Bill Summary · HB 2247

Overview

House Bill 2247 (Missouri, 2026) aims to reduce and ultimately eliminate the Missouri personal income tax over a multiyear timeline. The bill progressively reduces top tax rates beginning in 2023 and, beginning in 2027, requires annual rate reductions of one-eleventh of each bracket’s total rate, with the ultimate goal of zeroing out and eliminating the Missouri personal income tax by 2037. The bill also includes provisions for adjusting tax brackets and tables to reflect inflation and revenue conditions.

Main purpose and intent

  • To substantially reduce Missouri’s personal income tax and, by 2037, eliminate it entirely.
  • To implement a schedule of rate reductions tied to revenue conditions and a fixed annual reduction starting in 2027.
  • To adjust tax brackets periodically for inflation and to update the tax tables to reflect rate changes.

Key provisions and changes

  • Section 143.011: Repeals the current statute and replaces it with a new structure for Missouri taxable income and tax rates.
  • Tax brackets and top rates:
    • The bill preserves a tiered rate schedule (top rate and brackets) but commits to future reductions. The exact current bracket structure is shown in the bill text and would be adjusted by the Department of Revenue as rates change.
  • Rate reductions:
    • Subsection 2: Beginning in 2023, the top rate (for income over the highest bracket) is set at 4.95%, with adjustments via department rule. This top rate applies to income above the bracket threshold as adjusted.
    • Subsection 3: Beginning in 2024, the top rate may be reduced by 0.15 percentage points if net general revenue in the prior year exceeds the three-year high by at least $175 million. Reductions take effect January 1 of the following calendar year and continue until the next reduction.
    • Subsection 4: Beginning the year after a rate reduction under Subsection 3, the top rate may be further reduced by up to three one-tenth of a percent reductions (maximum of three reductions under this subsection). This is contingent on meeting net general revenue conditions (thresholds tied to revenue exceeding prior years by specified amounts and inflation-adjusted comparisons). Each reduction takes effect January 1 of the subsequent year.
    • Subsection 5 & 6: Brackets for Missouri taxable income are adjusted annually for inflation using CPI, with effective date rules for tax years beginning after the adjustment.
  • Long-term elimination:
    • Subsection 7: From 2027 through 2036, the total rate for each tax bracket is reduced annually by one-eleventh of the total percent of each rate as of December 31, 2026. By January 1, 2037, all rates are reduced to zero, eliminating the Missouri personal income tax.
    • Reductions are conditioned to be in effect only for tax years beginning after the applicable modification date and require the Department of Revenue to publish the revised tax tables.
  • Definitions:
    • The bill provides definitions for CPI, inflation measures, and “net general revenue collected” to determine revenue thresholds for rate reductions.

Who would be affected

  • Missouri residents with taxable income subject to personal income tax.
  • Taxpayers in all brackets, as bracket rates and the top rate are reduced over time.
  • Filers and employers would see changes in withholding calculations and tax tables as the Department of Revenue updates rules and tables.
  • State fiscal planners would need to account for progressively lower personal income tax revenues and adjust budgeting accordingly.

Procedural and timeline aspects

  • Effective dates and triggers:
    • Top rate reduction can begin in 2023 (and earlier reductions possible if revenue targets are met in subsequent years).
    • Inflation adjustments to bracket thresholds occur annually, effective January 1 following publication.
    • A formal, annual reduction path starts in 2027, with a defined cessation in 2037 when the tax would be eliminated.
  • Administrative role:
    • The Missouri Department of Revenue is tasked with issuing rules to implement rate changes and to update tax tables/brackets accordingly, including posting updates on its website.
  • Revenue conditions:
    • Many reductions are conditional on year-over-year net general revenue exceeding prior-year highs by specified margins and, for some steps, inflation-adjusted targets.

Potential impacts and considerations

  • Fiscal impact: Progressive tax reductions rely on projected growth in general revenue; the bill ties rate cuts to revenue performance, potentially affecting state budget planning and funding for services.
  • Tax burden: As the top rate and brackets decline, high-income and middle-income taxpayers would face lower marginal tax rates over time, with the eventual elimination of the tax by 2037.
  • Inflation indexing: Regular inflation-adjusted bracket updates reduce bracket creep but may alter the effective tax burden over time.
  • Administrative workload: Recurrent updates to tax tables and brackets require ongoing administrative actions by the Department of Revenue and clear guidance for taxpayers and employers.

Note: This summary reflects the bill’s text and its stated provisions as introduced. It does not account for amendments, committee changes, or final legislative actions.

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

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