SB 226 would revise Missouri’s individual income tax rate structure and make those changes contingent on voter approval at a referendum election in November 2026. The bill sets the top marginal income tax rate at 4.95% beginning with tax years starting on or after January 1, 2023, and directs the Department of Revenue to adjust the tax tables accordingly. It also preserves annual inflation adjustments to the income brackets and defines key terms used in the tax-rate formulas.
Beyond the initial rate setting, the bill creates a multi-step mechanism for additional tax cuts tied to state revenue growth. Beginning in 2024, the top rate could be reduced by 0.15 percentage points if net general revenue in the prior fiscal year exceeds the highest of the previous three fiscal years by at least $175 million. After that, further reductions of 0.1 percentage points could occur in later years if revenue growth exceeds a higher threshold of $200 million above the prior three-year high and also outpaces inflation-adjusted revenue from five years earlier. The bill also provides for bracket elimination as the top rate falls and requires the Department of Revenue to update the tax tables by rule.
In practical terms, SB 226 would amend section 143.011, RSMo, which governs Missouri’s individual income tax rates and brackets. It would affect resident taxpayers, the Department of Revenue, and state general revenue by tying future rate reductions to revenue performance and inflation. Because the bill includes a referendum clause, it would not take effect unless approved by voters.
The available context shows no committee transcript and no recorded votes, so there is no documented debate or formal legislative sentiment in the provided materials. Based on the bill text alone, the measure appears designed as a tax-cut proposal with automatic triggers rather than an immediate across-the-board reduction, suggesting a fiscally cautious approach to lowering taxes.
The main point of contention likely concerns the balance between tax relief and state revenue stability. Supporters would likely emphasize lower income tax rates and a formula that rewards revenue growth, while critics may worry that the triggers could reduce funding for state services or make revenue planning less predictable. The referendum requirement also indicates that the proposal is significant enough to be placed before voters rather than enacted solely through the legislature.
Impact
SB 226 would repeal and replace section 143.011, RSMo, changing Missouri’s individual income tax rate schedule and the conditions under which future rate reductions occur. It would require the Department of Revenue to revise tax tables by rule, continue annual inflation indexing of brackets, and establish revenue-based triggers for phased reductions in the top marginal rate. The bill would affect resident taxpayers, state revenue collections, and the administration of the income tax code, but it would only become law if approved by voters at the 2026 referendum election.
Sentiment
No committee discussion or vote history is provided, so there is no recorded legislative sentiment in the available materials. The bill’s structure suggests a pro-tax-cut posture, but one that is conditioned on revenue growth and voter approval, indicating an attempt to balance tax reduction goals with fiscal caution.
Contention
The likely contention is whether Missouri should reduce income tax rates and, if so, how quickly and under what fiscal conditions. Supporters would likely favor the lower top rate and automatic future reductions tied to revenue growth, while opponents may argue that the triggers are too aggressive or could jeopardize funding for public services. The referendum clause itself may also be a point of debate, since it shifts final approval to voters rather than leaving the policy entirely to the legislature.