(The Center Square) – Missouri will no longer tax Social Security benefits beginning in 2024 after Republican Gov. Mike Parson signed Senate Bill 190 into law on Thursday.
The bill was one of 31 signed into law as Parson completed action on all legislation sent to him by the General Assembly.
Missouri joined 39 other states in adopting a tax exemption for Social Security benefits. The bill also allows Missouri counties to freeze property tax rates for residents age 65 and older by approving an ordinance or placing it on a ballot for approval.
The bill passed in the House by a vote of 154-2 during the final days of the session. It passed the Senate 33-1 in April.
Taxing of Social Security benefits will end in the 2024 tax year. Currently, Missouri residents pay taxes on Social Security if their adjusted gross annual income is $85,000 or, if married, $100,000 or more.
While the bill is 13 pages, the Committee on Legislative Research published a 113-page fiscal note in June to explain its impact on the state and Missouri’s 114 counties. It estimated the state’s general revenue will decrease approximately $130 million in fiscal year 2024 and up to $309 million in the following two fiscal years.
Most of the fiscal note provides information on how counties will be affected if they implement the freeze on property taxes for those 65 and older.
The fiscal note provided estimates on the number and percentage of qualifying seniors in each county and the current median value of homes and the average property tax bill. It also estimated the total loss of tax revenue for all counties.
Jackson County was forecast to lose $7.5 million in the first year if the law is enacted and $15.4 million in the second year. St. Louis County was projected to lose $9.1 million in the first year and $18.6 million in the second year.
The fiscal note also used Internal Revenue Service data to estimate the amount of income that will no longer be taxable. Approximately $689,197,344 in Social Security payments for taxpayers filing single will be exempt, $172,665,756 for taxpayers filing head of household and $2,353,388,312 for married filing joint taxpayers. The total amount exempted is $3,215,251,412, the report stated.
Senate Bill 189, a 142-page bill changing numerous criminal laws, was the only item vetoed by Parson. Parson disapproved of a provision allowing criminals convicted of sexual offenses to have their records expunged and be removed from the sex offender registry. He also disapproved expanding restitution for those convicted in certain situations and having the state pay increased restitution instead of local entities.
“SB 189 contains many public safety measures that we support and would like to sign into law, including Blair’s Law, Max’s Law, increased penalties for violent repeat offenders and gun crimes, and strengthening the public defender system,” Parson said in a statement. “However, in this case, these unintended consequences unfortunately outweigh the good. Missourians know I am a law-and-order Governor and that improving public safety is a cornerstone of our administration, but I cannot sign this bill with these provisions as they are currently written.”