HB 547 -- Income Tax:  Federal Income Tax Deduction

Sponsor:  Froelker

This bill increases the maximum state income tax deduction for
federal income taxes paid by individuals.  Under current law,
individuals are allowed to deduct up to $5,000 on a single
return and $10,000 on a married filing combined return.  The
bill increases the maximum deduction to $5,500 and $11,000 in
tax years 2002 and 2003 and to $6,000 and $12,000 in tax year
2004 and thereafter.

The bill also increases the state income tax deduction for
federal income taxes paid by corporations.  Under current law,
corporations are allowed to deduct 50% of federal income tax
paid.  The bill increases the deduction to 52.5% in tax years
2002 and 2003 and to 55% in tax year 2004 and thereafter.

The bill also replaces the lost transfers to the Outstanding
Schools Trust Fund resulting from the increased deduction for
federal income taxes paid by individuals and corporations with
general revenue funds.

Missouri House of Representatives
Last Updated September 13, 2001 at 2:02 pm