(The Center Square) – Legislators moved one step closer to giving hundreds of millions of surplus tax dollars back to Missouri citizens on Friday.
A Senate amendment providing $500 million in tax credits was added early Friday to House Bill 2090, originally focused on allowing salaries of state employees to be paid in bi-weekly installments. It passed 104-30.
Those with an adjusted gross income of less than $150,000 for individuals and less than $300,000 for married couples will be eligible for the tax credit during the 2021 tax year. The bill states the credit will be the lesser of income tax due, or $500 in the case of individuals or $1,000 for married couples.
The bill’s sponsor, Rep. Dave Griffith, R-Jefferson City, said during floor debate he didn’t learn about the amendment or the plan for a House vote until 9:30 a.m.
A similar bill with $1 billion in tax credits was part of an appropriations bill passed by the House in April. Budget Chairman Cody Smith, R-Carthage, told the House he preferred keeping the larger amount and not limiting it by income.
“I won’t let the perfect be the enemy of the good,” Smith said. “These are real tax dollars going back to real taxpayers. This is not a redistribution of wealth.”
As they did during the debate on the tax credit in the appropriations bill, Democrats advocated for giving relief to those who don’t pay income tax but pay a high percentage of earnings in sales taxes.
“Just because you don’t pay income tax does not mean you don’t pay into the treasury,” said Rep. Peter Merideth, D-St. Louis. “Your tax dollars are going to GR (general revenue) as well. Sales tax goes to GR. And suggesting that they did not pay in when we all know they pay more of their hard-earned dollars—a higher percentage of their hard-earned dollars – every year into taxes than those at the higher end… it’s just a lie.”
Rep. Barbara Phifer, D-St. Louis, recalled her family’s state income taxes were reduced by deductions for dependents as she raised five children. However, she said the amount of sales taxes she paid on food, clothing and other necessities was significant.
“What we are doing is really discriminating against young families,” Phifer said. “I feel sad about that. We could have done this differently.”
Rep. Doug Richey, R-Excelsior Springs, said the state’s income tax policy allows low-wage earners to keep more of their wages.
“What we must remember is individuals with no tax liability have already benefited by the charitable move on the part of the state of Missouri in determining they don’t make enough money for the state to take money out of their pay,” Richey said. “So the state has already taken a position for the benefit of those who don’t make enough money to take care of many of their own needs.”
The bill also contained a Senate amendment prohibiting any mandate for state employees to receive a COVID-19 vaccination as a condition of employment, with an exception for the state’s hospital and long-term care employees.