JEFFERSON CITY, Mo. – In an effort to further create a business-friendly economy, the Missouri House of Representatives has approved HB 2274, a significant piece of legislation that proposes a phased reduction and eventual elimination of the state’s corporate income tax. With a vote of 100-50, the House passed the bill, setting a course for transformative change in the state’s economic landscape.
HB 2274, sponsored by State Representative Travis Smith, would set Missouri on a progressive path towards improving the state’s competitiveness by gradually reducing and ultimately abolishing the corporate income tax burden. Under the provisions outlined in the bill, the taxable income of corporations will see a phased reduction over the coming years, signaling a clear commitment to fostering a more business-friendly environment in the state.
Smith said the lowered tax rate for businesses will help existing companies create more jobs and will entice new businesses to set up shop in Missouri.
“When we look at where economic growth and job growth are taking place across the nation, it’s in states that have a low tax burden,” Rep. Smith, R-Dora, said. “We want Missouri to be an ideal location for companies to do business and to create family-supporting jobs that our hard-working citizens need and deserve. By passing HB 2274, the House has taken a bold step towards stimulating economic growth, attracting new businesses, and creating a more prosperous future for all Missourians.”
The phased reduction schedule outlined in HB 2274 is as follows:
- Beginning January 1, 2025:The taxable income of corporations will be reduced to 3% of Missouri taxable income.
- Beginning January 1, 2026:The taxable income of corporations will be further reduced to 2% of Missouri taxable income.
- Beginning January 1, 2027:The taxable income of corporations will be reduced to 1% of Missouri taxable income.
- For all tax years beginning on or after January 1, 2028:There will be no tax imposed upon the Missouri taxable income of corporations.
Furthermore, the bill stipulates that once the corporate tax is fully phased out, no new corporate income tax credits shall be claimed. However, corporations may still redeem refundable tax credits properly claimed and issued before the corporate tax is eliminated.
The reduction and eventual elimination of the corporate income tax by passing HB 2274 will position Missouri as a more attractive destination for businesses, fostering job creation and economic prosperity across the state. The phased approach allows ample time for necessary adjustments and mitigates potential revenue losses through the elimination of existing tax credits for corporations. The House’s approval underscores a shared commitment to spurring economic growth and driving Missouri towards a brighter future.
“As we pass HB 2274, we’re not just reducing taxes; we’re paving the way for a brighter economic future in Missouri,” House Speaker Dean Plocher, R-Des Peres, said. “This legislation signals our commitment to fostering an environment where small businesses can invest their money in their businesses and communities, creating opportunities for prosperity and growth for all Missourians.”
The bill now heads to the Missouri Senate for further consideration.