A number of provisions included in the recently passed federal tax law will affect state revenue collections because of the way state and federal tax laws interact. While most of these implications are clear, the way that Missouri’s state personal exemption for individual income tax is linked with federal law has left ambiguity that could ultimately result in a $440 million annual hit to the state budget.
State lawmakers can protect the services that Missourians and communities need to thrive by decoupling from the changes made in the federal tax bill or, at a minimum, by clarifying Missouri’s personal exemption statute. Decoupling in the current legislative session is particularly important for Missouri due to the constitutional restrictions on lawmakers to raise revenue.
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