Modifies provisions relating to taxation

SECOND REGULAR SESSION
HOUSE COMMITTEE SUBSTITUTE FOR
SENA TE BILL NO. 994
103RD GENERAL ASSEMBL Y
4828H.04C JOSEPH ENGLER, Chief Clerk
AN ACT
T o repeal sections 143.121, 143.174, 143.175, 143.51 1, 143.591, 143.621, and 143.971,
RSMo, and to enact in lieu thereof six new sections relating to income tax, with a
delayed ef fective date for certain sections.
Be it enacted by the General Assembly of the state of Missouri, as follows:
Section A. Sections 143.121, 143.174, 143.175, 143.51 1, 143.591, 143.621, and
2 143.971, RSMo, are repealed and six new sections enacted in lieu thereof, to be known as
3 sections 143.121, 143.51 1, 143.512, 143.591, 143.621, and 143.971, to read as follows:
143.121. 1. The Missouri adjusted gross income of a resident individual shall be the
2 taxpayer's federal adjusted gross income subject to the modifications in this section.
3 2. There shall be added to the taxpayer's federal adjusted gross income:
4 (1) The amount of any federal income tax refund received for a prior year which
5 resulted in a Missouri income tax benefit. The amount added pursuant to this subdivision
6 shall not include any amount of a federal income tax refund attributable to a tax credit
7 reducing a taxpayer's federal tax liability pursuant to Public Law 1 16-136 or 1 16-260, enacted
8 by the 1 16th United States Congress, for the tax year beginning on or after January 1, 2020,
9 and ending on or before December 31, 2020, and deducted from Missouri adjusted gross
10 income pursuant to section 143.171. The amount added under this subdivision shall also not
11 include any amount of a federal income tax refund attributable to a tax credit reducing a
12 taxpayer's federal tax liability under any other federal law that provides direct economic
13 impact payments to taxpayers to mitigate financial challenges related to the COVID-19
14 pandemic, and deducted from Missouri adjusted gross income under section 143.171;
15 (2) Interest on certain governmental obligations excluded from federal gross income
16 by 26 U.S.C. Section 103 of the Internal Revenue Code, as amended. The previous sentence
EXPLANA TION — Matter enclosed in bold-faced brackets [thus] in the above bill is not enacted and is
intended to be omitted from the law . Matter in bold-face type in the above bill is proposed language.
17 shall not apply to interest on obligations of the state of Missouri or any of its political
18 subdivisions or authorities and shall not apply to the interest described in subdivision (1) of
19 subsection 3 of this section. The amount added pursuant to this subdivision shall be reduced
20 by the amounts applicable to such interest that would have been deductible in computing the
21 taxable income of the taxpayer except only for the application of 26 U.S.C. Section 265 of the
22 Internal Revenue Code, as amended. The reduction shall only be made if it is at least five
23 hundred dollars;
24 (3) The amount of any deduction that is included in the computation of federal
25 taxable income pursuant to 26 U.S.C. Section 168 of the Internal Revenue Code as amended
26 by the Job Creation and W orker Assistance Act of 2002 to the extent the amount deducted
27 relates to property purchased on or after July 1, 2002, but before July 1, 2003, and to the
28 extent the amount deducted exceeds the amount that would have been deductible pursuant to
29 26 U.S.C. Section 168 of the Internal Revenue Code of 1986 as in effect on January 1, 2002;
30 (4) The amount of any deduction that is included in the computation of federal
31 taxable income for net operating loss allowed by 26 U.S.C. Section 172 of the Internal
32 Revenue Code of 1986, as amended, other than the deduction allowed by 26 U.S.C. Section
33 172(b)(1)(G) and 26 U.S.C. Section 172(i) of the Internal Revenue Code of 1986, as
34 amended, for a net operating loss the taxpayer claims in the tax year in which the net
35 operating loss occurred or carries forward for a period of more than twenty years and carries
36 backward for more than two years. Any amount of net operating loss taken against federal
37 taxable income but disallowed for Missouri income tax purposes pursuant to this subdivision
38 after June 18, 2002, may be carried forward and taken against any income on the Missouri
39 income tax return for a period of not more than twenty years from the year of the initial loss;
40 and
41 (5) For nonresident individuals in all [ taxable ] tax years ending on or after December
42 31, 2006, the amount of any property taxes paid to another state or a political subdivision of
43 another state for which a deduction was allowed on such nonresident's federal return in the
44 [ taxable ] tax year unless such state, political subdivision of a state, or the District of
45 Columbia allows a subtraction from income for property taxes paid to this state for purposes
46 of calculating income for the income tax for such state, political subdivision of a state, or the
47 District of Columbia;
48 (6) For all tax years beginning on or after January 1, 2018, any interest expense paid
49 or accrued in a previous [ taxable ] tax year , but allowed as a deduction under 26 U.S.C.
50 Section 163, as amended, in the current [ taxable ] tax year by reason of the carryforward of
51 disallowed business interest provisions of 26 U.S.C. Section 163(j), as amended. For the
52 purposes of this subdivision, an interest expense is considered paid or accrued only in the first
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53 [ taxable ] tax year the deduction would have been allowable under 26 U.S.C. Section 163, as
54 amended, if the limitation under 26 U.S.C. Section 163(j), as amended, did not exist.
55 3. There shall be subtracted from the taxpayer's federal adjusted gross income the
56 following amounts to the extent included in federal adjusted gross income:
57 (1) Interest received on deposits held at a federal reserve bank or interest or dividends
58 on obligations of the United States and its territories and possessions or of any authority ,
59 commission or instrumentality of the United States to the extent exempt from Missouri
60 income taxes pursuant to the laws of the United States. The amount subtracted pursuant to
61 this subdivision shall be reduced by any interest on indebtedness incurred to carry the
62 described obligations or securities and by any expenses incurred in the production of interest
63 or dividend income described in this subdivision. The reduction in the previous sentence
64 shall only apply to the extent that such expenses including amortizable bond premiums are
65 deducted in determining the taxpayer's federal adjusted gross income or included in the
66 taxpayer's Missouri itemized deduction. The reduction shall only be made if the expenses
67 total at least five hundred dollars;
68 (2) The portion of any gain, from the sale or other disposition of property having a
69 higher adjusted basis to the taxpayer for Missouri income tax purposes than for federal
70 income tax purposes on December 31, 1972, that does not exceed such dif ference in basis. If
71 a gain is considered a long-term capital gain for federal income tax purposes, the modification
72 shall be limited to one-half of such portion of the gain;
73 (3) The amount necessary to prevent the taxation pursuant to this chapter of any
74 annuity or other amount of income or gain which was properly included in income or gain and
75 was taxed pursuant to the laws of Missouri for a [ taxable ] tax year prior to January 1, 1973, to
76 the taxpayer , or to a decedent by reason of whose death the taxpayer acquired the right to
77 receive the income or gain, or to a trust or estate from which the taxpayer received the income
78 or gain;
79 (4) Accumulation distributions received by a taxpayer as a beneficiary of a trust to the
80 extent that the same are included in federal adjusted gross income;
81 (5) The amount of any state income tax refund for a prior year which was included in
82 the federal adjusted gross income;
83 (6) The portion of capital gain specified in section 135.357 that would otherwise be
84 included in federal adjusted gross income;
85 (7) The amount that would have been deducted in the computation of federal taxable
86 income pursuant to 26 U.S.C. Section 168 of the Internal Revenue Code as in effect on
87 January 1, 2002, to the extent that amount relates to property purchased on or after July 1,
88 2002, but before July 1, 2003, and to the extent that amount exceeds the amount actually
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89 deducted pursuant to 26 U.S.C. Section 168 of the Internal Revenue Code as amended by the
90 Job Creation and W orker Assistance Act of 2002;
91 (8) [ For all tax years beginning on or after January 1, 2005, the amount of any income
92 received for military service while the taxpayer serves in a combat zone which is included in
93 federal adjusted gross income and not otherwise excluded therefrom. As used in this section,
94 "combat zone" means any area which the President of the United States by Executive Order
95 designates as an area in which Armed Forces of the United States are or have engaged in
96 combat. Service is performed in a combat zone only if performed on or after the date
97 designated by the President by Executive Order as the date of the commencing of combat
98 activities in such zone, and on or before the date designated by the President by Executive
99 Order as the date of the termination of combatant activities in such zone ] For all tax years
100 beginning on or after January 1, 2027, one hundr ed percen t of all military income
101 r eceived by a taxpayer , regar dless of duty status or filing status. For the purposes of this
102 subdivision, the following terms mean:
103 (a) "Military income", all taxable pay , benefits, and allowances paid to or
104 r eceived by a member or former member of the uniformed services as salary , ret irem ent
105 benefits, or compensation in any form for military service in the uniformed services
106 including, but not limited to, basic pay , drill pay , annual training pay , active duty pay ,
107 active duty training pay , special and incentive pay , bonuses, inactive duty training (IDT)
108 pay , annual training (A T) pay , and any other form of military income;
109 (b) "Uniformed services", any branch or rese rve component of the Armed
110 For ces of the United States or the National Guard, as such terms ar e defined in 32
111 U.S.C. Section 101, as amended ;
112 (9) For all tax years ending on or after July 1, 2002, with respect to qualified property
113 that is sold or otherwise disposed of during a taxable year by a taxpayer and for which an
114 additional modification was made under subdivision (3) of subsection 2 of this section, the
115 amount by which additional modification made under subdivision (3) of subsection 2 of this
116 section on qualified property has not been recovered through the additional subtractions
117 provided in subdivision (7) of this subsection;
118 (10) For all tax years beginning on or after January 1, 2014, the amount of any
119 income received as payment from any program which provides compensation to agricultural
120 producers who have suf fered a loss as the result of a disaster or emer gency , including the:
121 (a) Livestock Forage Disaster Program;
122 (b) Livestock Indemnity Program;
123 (c) Emer gency Assistance for Livestock, Honeybees, and Farm-Raised Fish;
124 (d) Emerg ency Conservation Program;
125 (e) Noninsured Crop Disaster Assistance Program;
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126 (f) Pasture, Rangeland, Forage Pilot Insurance Program;
127 (g) Annual Forage Pilot Program;
128 (h) Livestock Risk Protection Insurance Plan;
129 (i) Livestock Gross Mar gin Insurance Plan;
130 (1 1) For all tax years beginning on or after January 1, 2018, any interest expense paid
131 or accrued in the current [ taxable ] tax year , but not deducted as a result of the limitation
132 imposed under 26 U.S.C. Section 163(j), as amended. For the purposes of this subdivision, an
133 interest expense is considered paid or accrued only in the first [ taxable ] tax year the deduction
134 would have been allowable under 26 U.S.C. Section 163, as amended, if the limitation under
135 26 U.S.C. Section 163(j), as amended, did not exist;
136 (12) [One hundred percent of any retirement benefits received by any taxpayer as a
137 result of the taxpayer's service in the Armed Forces of the United States, including reserve
138 components and the National Guard of this state, as defined in 32 U.S.C. Sections 101(3) and
139 109, and any other military force or ganized under the laws of this state;
140 (13) ] For all tax years beginning on or after January 1, 2022, one hundred percent of
141 any federal, state, or local grant moneys received by the taxpayer if the grant money was
142 disbursed for the express purpose of providing or expanding access to broadband internet to
143 areas of the state deemed to be lacking such access;
144 [ (14) ] (13) (a) For all tax years beginning on or after January 1, 2025, one hundred
145 percent of all income reported as a capital gain for federal income tax purposes by an
146 individual subject to tax pursuant to section 143.01 1; and
147 (b) For all tax years beginning on or after January first of the tax year following the
148 tax year in which the top rate of tax imposed pursuant to section 143.01 1 is equal to or less
149 than four and one-half percent, one hundred percent of all income reported as a capital gain
150 for federal income tax purposes by an entity subject to tax pursuant to section 143.071; and
151 [ (15) ] (14) For all tax years beginning on or after January 1, 2026, the portion of
152 capital gain on the sale or exchange of specie, as that term is defined in section 408.010, that
153 are otherwise included in the taxpayer's federal adjusted gross income.
154 4. There shall be added to or subtracted from the taxpayer's federal adjusted gross
155 income the taxpayer's share of the Missouri fiduciary adjustment provided in section 143.351.
156 5. There shall be added to or subtracted from the taxpayer's federal adjusted gross
157 income the modifications provided in section 143.41 1.
158 6. In addition to the modifications to a taxpayer's federal adjusted gross income in this
159 section, to calculate Missouri adjusted gross income there shall be subtracted from the
160 taxpayer's federal adjusted gross income any gain recognized pursuant to 26 U.S.C. Section
161 1033 of the Internal Revenue Code of 1986, as amended, arising from compulsory or
162 involuntary conversion of property as a result of condemnation or the imminence thereof.
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163 7. (1) As used in this subsection, "qualified health insurance premium" means the
164 amount paid during the tax year by such taxpayer for any insurance policy primarily
165 providing health care coverage for the taxpayer , the taxpayer's spouse, or the taxpayer's
166 dependents.
167 (2) In addition to the subtractions in subsection 3 of this section, one hundred percent
168 of the amount of qualified health insurance premiums shall be subtracted from the taxpayer's
169 federal adjusted gross income to the extent the amount paid for such premiums is included in
170 federal taxable income. The taxpayer shall provide the department of revenue with proof of
171 the amount of qualified health insurance premiums paid.
172 8. (1) Beginning January 1, 2014, in addition to the subtractions provided in this
173 section, one hundred percent of the cost incurred by a taxpayer for a home ener gy audit
174 conducted by an entity certified by the department of natural resources under section 640.153
175 or the implementation of any ener gy efficien cy recommendations made in such an audit shall
176 be subtracted from the taxpayer's federal adjusted gross income to the extent the amount paid
177 for any such activity is included in federal taxable income. The taxpayer shall provide the
178 department of revenue with a summary of any recommendations made in a qualified home
179 ener gy audit, the name and certification number of the qualified home ener gy auditor who
180 conducted the audit, and proof of the amount paid for any activities under this subsection for
181 which a deduction is claimed. The taxpayer shall also provide a copy of the summary of any
182 recommendations made in a qualified home ener gy audit to the department of natural
183 resources.
184 (2) At no time shall a deduction claimed under this subsection by an individual
185 taxpayer or taxpayers filing combined returns exceed one thousand dollars per year for
186 individual taxpayers or cumulatively exceed two thousand dollars per year for taxpayers
187 filing combined returns.
188 (3) Any deduction claimed under this subsection shall be claimed for the tax year in
189 which the qualified home energ y audit was conducted or in which the implementation of the
190 ener gy ef ficiency recommendations occurred. If implementation of the ener gy ef ficiency
191 recommendations occurred during more than one year , the deduction may be claimed in more
192 than one year , subject to the limitations provided under subdivision (2) of this subsection.
193 (4) A deduction shall not be claimed for any otherwise eligible activity under this
194 subsection if such activity qualified for and received any rebate or other incentive through a
195 state-sponsored ener gy program or through an electric corporation, gas corporation, electric
196 cooperative, or municipally owned utility .
197 9. The provisions of subsection 8 of this section shall expire on December 31, 2020.
198 10. (1) As used in this subsection, the following terms mean:
199 (a) "Beginning farmer", a taxpayer who:
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200 a. Has filed at least one but not more than ten Internal Revenue Service Schedule F
201 (Form 1040) Profit or Loss From Farming forms since turning eighteen years of age;
202 b. Is approved for a beginning farmer loan through the USDA Farm Service Agency
203 Beginning Farmer direct or guaranteed loan program;
204 c. Has a farming operation that is determined by the department of agriculture to be
205 new production agriculture but is the principal operator of a farm and has substantial farming
206 knowledge; or
207 d. Has been determined by the department of agriculture to be a qualified family
208 member;
209 (b) "Farm owner", [ an individual ] a taxpayer who owns farmland and disposes of or
210 relinquishes use of all or some portion of such farmland as follows:
211 a. A sale to a beginning farmer;
212 b. A lease or rental agreement not exceeding ten years with a beginning farmer; or
213 c. A crop-share arrangement not exceeding ten years with a beginning farmer;
214 (c) "Qualified family member", an individual who is related to a farm owner within
215 the fourth degree by blood, marriage, or adoption and who is purchasing or leasing or is in a
216 crop-share arrangement for land from all or a portion of such farm owner's farming operation ;
217 (d) "T axpayer", any individual, trust, firm, partner in a firm, corporation,
218 partnership, shar eholder in an S corporation, or member of a limited liability company
219 subject to the income tax imposed under this chapter , excluding withholding tax
220 imposed under sections 143.191 to 143.265 .
221 (2) (a) In addition to all other subtractions authorized in this section, a taxpayer who
222 is a farm owner who sells all or a portion of such farmland to a beginning farmer may subtract
223 from such taxpayer's Missouri adjusted gross income an amount to the extent included in
224 federal adjusted gross income as provided in this subdivision.
225 (b) Subject to the limitations in paragraph (c) of this subdivision, the amount that may
226 be subtracted shall be equal to the portion of capital gains received from the sale of such
227 farmland that such taxpayer receives in the tax year for which such taxpayer subtracts such
228 capital gain.
229 (c) A taxpayer may subtract the following amounts and percentages per tax year in
230 total capital gains received from the sale of such farmland under this subdivision:
231 a. For the first two million dollars received, one hundred percent;
232 b. For the next one million dollars received, eighty percent;
233 c. For the next one million dollars received, sixty percent;
234 d. For the next one million dollars received, forty percent; and
235 e. For the next one million dollars received, twenty percent.
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236 (d) The department of revenue shall prepare an annual report reviewing the costs and
237 benefits and containing statistical information regarding the subtraction of capital gains
238 authorized under this subdivision for the previous tax year including, but not limited to, the
239 total amount of all capital gains subtracted and the number of taxpayers subtracting such
240 capital gains. Such report shall be submitted before February first of each year to the
241 committee on agriculture policy of the Missouri house of representatives and the committee
242 on agriculture, food production and outdoor resources of the Missouri senate, or the successor
243 committees.
244 (3) (a) In addition to all other subtractions authorized in this section, a taxpayer who
245 is a farm owner who enters a lease or rental agreement for all or a portion of such farmland
246 with a beginning farmer may subtract from such taxpayer's Missouri adjusted gross income an
247 amount to the extent included in federal adjusted gross income as provided in this
248 subdivision.
249 (b) Subject to the limitation in paragraph (c) of this subdivision, the amount that may
250 be subtracted shall be equal to the portion of cash rent income received from the lease or
251 rental of such farmland that such taxpayer receives in the tax year for which such taxpayer
252 subtracts such income.
253 (c) No taxpayer shall subtract more than twenty-five thousand dollars per tax year in
254 total cash rent income received from the lease or rental of such farmland under this
255 subdivision.
256 (4) (a) In addition to all other subtractions authorized in this section, a taxpayer who
257 is a farm owner who enters a crop-share arrangement on all or a portion of such farmland with
258 a beginning farmer may subtract from such taxpayer's Missouri adjusted gross income an
259 amount to the extent included in federal adjusted gross income as provided in this
260 subdivision.
261 (b) Subject to the limitation in paragraph (c) of this subdivision, the amount that may
262 be subtracted shall be equal to the portion of income received from the crop-share
263 arrangement on such farmland that such taxpayer receives in the tax year for which such
264 taxpayer subtracts such income.
265 (c) No taxpayer shall subtract more than twenty-five thousand dollars per tax year in
266 total income received from the lease or rental of such farmland under this subdivision.
267 (5) The department of agriculture shall, by rule, establish a process to verify that a
268 taxpayer is a beginning farmer for purposes of this section and shall provide verification to
269 the beginning farmer and farm seller of such farmer's and seller's certification and
270 qualification for the exemption provided in this subsection.
143.51 1. Income tax returns required by [ sections 143.01 1 to 143.996 ] this chapter
2 shall be filed on or before the [ fifteenth day of the fourth month following the close of the
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3 taxpayer's taxable year except where the taxpayer is an exempt or ganization. Exempt
4 or ganizations shall have the same due date as set by the Internal Revenue Code of 1986, as
5 amended ] date pr escribed by 26 U.S.C. 6072 for the filing of ret urns for federal tax
6 purposes . A person required to make and file a return under [ sections 143.01 1 to 143.996 ]
7 this chapter shall, without assessment, notice, or demand, pay any tax due thereon to the
8 director of revenue on or before the date fixed for filing such return (determined without
9 regard to any extension of time for filing the return). The director of revenue shall prescribe
10 by regulation the place for filing any return, declaration, statement, or other document
11 required pursuant to this chapter and for the payment of any tax.
143.512 . 1. Notwithstanding any other prov ision of law to the contrary , if a
2 taxpayer has a state income tax balance due res ulting fr om the full or partial denial of a
3 tax credit, the taxpayer shall not be held liable for any addition to tax, penalty , or
4 inter est on that amount of the income tax balance due. This section shall apply only if:
5 (1) The only reas on for the full or partial denial of the tax cr edit was the
6 cumulative maximum amount of such tax cr edits being claimed, appr oved, issued, or
7 r edeemed for the rel evant year;
8 (2) The income tax balance due is paid, or payment arrangements appr oved by
9 the state have been made, within sixty days of the taxpayer recei ving notice of, or
10 otherwise being informed of, the full or partial cred it denial; and
11 (3) The addition to tax or penalty is not due to fraud or fraudulent intent.
12 2. For purposes of this section, the term "tax credi t" shall mean a cred it against
13 tax otherwise due under chapter 143, excluding withholding tax under sections 143.191
14 to 143.265.
15 3. This section shall apply only to income tax balances due arising on or after
16 August 28, 2026.
143.591. The director of revenue may prescribe regulations and instructions requiring
2 returns of information to be made and filed on or before February twenty-eighth of each year
3 by any person making payment or crediting in any calendar year the amounts of one thousand
4 two hundred dollars or more (one hundred dollars or more in the case of interest or dividends)
5 to any person who may be subject to the tax imposed under sections 143.01 1 to 143.996.
6 Such returns may be required of any person, including lessees or mortgagors of real or
7 personal property , fiduciaries, employers, and all of ficers and employees of this state, or of
8 any municipal corporation or political subdivision of this state, having the control, receipt,
9 custody , disposal or payment of dividends, interest, rents, salaries, wages, premiums,
10 annuities, compensations, remunerations, emoluments or other fixed or determinable gains,
11 profits, or income, except interest coupons payable to bearer . A duplicate of the statement as
12 to tax withheld on wages, required to be furnished by an employer to an employee, shall
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13 constitute the return of information required to be made under this section with respect to
14 such wages. Such return shall not be required unless the person is required to file a return or
15 report containing the same or similar information to the United States Internal Revenue
16 Service. Beginning January 1, [ 2018 ] 2027 , such returns for tax withheld on wages paid in
17 the previous tax year submitted by an employer with at least [ two hundred fifty ] ten
18 employees shall be submitted electronically by January thirty-first. Such returns shall be
19 submitted using the same file specifications for filing forms electronically with the Social
20 Security Administration. If an employer is granted a waiver of the federal requirement to file
21 electronically by the Internal Revenue Service, the filing of a copy of the approved waiver
22 with the director shall automatically waive the requirement to file electronically with the
23 director .
143.621. 1. Sixty days after the date on which it was mailed (one hundred fifty days
2 if the taxpayer is outside the United States), a notice of deficiency shall constitute a final
3 assessment of the amount of tax specified together with interest, additions to tax, and
4 penalties except only for such amounts as to which the taxpayer has filed a protest with the
5 director of revenue.
6 2. Notwithstanding the pr ovisions of subsection 1 of this section to the contrary ,
7 a taxpayer that has paid a deficiency and any interes t, additions to tax, or penalties
8 attributable to such deficiency that is subsequently found to be erro neous, r egardless of
9 whether such taxpayer has timely filed a pr otest with the dir ector of reven ue, shall be
10 entitled to a ref und in the amount of the deficiency and any inter est, additions to tax, or
11 penalties attributable to such deficiency that wer e paid by the taxpayer . Such r efund
12 shall be paid as pro vided in sections 143.781 to 143.841.
143.971. 1. (1) The director of revenue may prescribe the form and contents of any
2 return or other document required to be filed under the provisions of sections 143.01 1 to
3 143.996.
4 (2) Notwithstanding any pr ovision of law to the contrary , the form of retu rn
5 r equir ed by this chapter for any tax year beginning on or after January 1, 2026, shall
6 indicate the name of the public school district in which the taxpayer r esides.
7 2. The director of revenue for the purpose of ascertaining the correctness of any
8 return, or for the purpose of making an estimate of taxable income of any person, shall have
9 power to examine or to cause to have examined, by any agent or representative designated by
10 him for that purpose, any books, papers, records, or memoranda bearing upon the matters
11 required to be included in the return, and may require the attendance of the person rendering
12 the return or any officer or employee of such person, or the attendance of any other person
13 having knowledge in the premises, and may take testimony and require proof material for his
14 information, with power to administer oaths to such person or persons.
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15 3. Reports and returns required to be filed under sections 143.01 1 to 143.996 shall be
16 preserved for four years and thereafter until the director of revenue orders them to be
17 destroyed.
[ 143.174 . For all tax years beginning on or after January 1, 2016, for
2 purposes of calculating the Missouri taxable income as required under section
3 143.01 1, one hundred percent of the income received by any person as salary
4 or compensation in any form as a member of the active duty component of the
5 Armed Forces of the United States, and to the extent that such income is
6 included in the federal adjusted gross income, may be deducted from the
7 taxpayer's Missouri adjusted gross income to determine such taxpayer's
8 Missouri taxable income. If such person files a combined return with a
9 spouse, any military income received while engaging in the performance of
10 active duty may be deducted from their Missouri combined adjusted gross
11 income. For the purposes of this section, "salary or compensation" shall
12 include any signing bonus. ]
[ 143.175 . 1. For all tax years beginning on or after January 1, 2020,
2 for purposes of calculating the Missouri taxable income as required under
3 section 143.01 1, a percentage of the income received by any person as salary
4 or compensation:
5 (1) In performance of inactive duty for training (IDT) of the National
6 Guard or annual training status (A T) of the National Guard;
7 (2) In reserve components of the Armed Forces of the United States;
8 or
9 (3) For all tax years beginning on or after January 1, 2025, in the form
10 of a bonus from the National Guard or a reserve component of the United
11 States Armed Forces for joining, reenlisting, or for any other reason;
12
13 and to the extent that such income is included in the federal adjusted gross
14 income, may be deducted from the taxpayer's Missouri adjusted gross income
15 to determine such taxpayer's Missouri taxable income. If such person files a
16 combined return with a spouse, a percentage of any military income received
17 while engaging in the performance of National Guard or reserve military duty
18 may be deducted from their Missouri combined adjusted gross income. Such
19 military income shall be deducted as follows:
20 (a) For the tax year beginning on or after January 1, 2020, twenty
21 percent of such military income;
22 (b) For the tax year beginning on or after January 1, 2021, forty
23 percent of such military income;
24 (c) For the tax year beginning on or after January 1, 2022, sixty
25 percent of such income;
26 (d) For the tax year beginning on or after January 1, 2023, eighty
27 percent of such income;
28 (e) For all tax years beginning on January 1, 2024, and thereafter , one
29 hundred percent of such income.
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30 2. Notwithstanding the provisions of this section or any other
31 provision of law to the contrary , the deduction authorized by this section shall
32 not apply to compensation received while engaging in civilian federal service,
33 including civil service positions requiring the wearing of military uniform and
34 military af filiation. ]
Section B. The repeal and reenactment of section 143.121 and the repeal of sections
2 143.174 and 143.175 of this act shall become ef fective on January 1, 2027, and shall apply
3 only to tax years beginning on or after January 1, 2027.
✔
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