Missouri – Governor Parson recently announced that Missouri residents will be getting another tax cut in 2025. This will make it the fourth straight year of reductions.
On Tuesday, July 30, 2024, Parson’s administration stated that the top income tax rate will decline from 4.8% to 4.7% starting on January 1, 2025. The reduction is the result of the 2022 state law that set forth a series of revenue benchmarks that were capable of triggering tax cuts in future years. When Missouri’s revenue figures came out for the 2024 fiscal year, a tax formula took into account money set aside for savings and other income and found that Missouri taxes were high enough that Missouri qualified for a tax cut.
Budget Director Dan Haug stated that the state made larger-than-usual transfers in the 2023 fiscal year to its constitutionally required savings fund and a maintenance and repair fund for state facilities. This reduced the base-year revenue figure used in the tax-cutting formula, making the 2024 growth sufficient to make another rate reduction.
The top income tax rate sat at 5.4%. This was before the state law that started a series of gradual tax reductions.
