Modifies provisions relating to taxation
SB 27 would substantially change Missouri’s individual income tax structure and create a new tax on certain higher-education endowments. On the income tax side, it repeals and replaces section 143.011 to set a schedule of automatic rate reductions beginning in 2023, starting with a top rate of 4.95 percent and allowing additional reductions in later years if state general revenue growth meets specified thresholds. The bill also keeps annual inflation adjustments to the income tax brackets and directs the Department of Revenue to update the tax tables by rule to reflect the new rates and bracket structure.
The bill’s second major provision creates section 146.200, which imposes a 1.9 percent tax on the endowment assets of a “qualifying institution of higher education” beginning in tax years starting on or after January 1, 2026. A qualifying institution is defined by its relationship to abortion-related activity, including affiliation with an abortion facility, providing medical training in abortion procedures, or supporting abortion facilities where abortions are performed outside life-saving circumstances. Revenue from this endowment tax would go to the state general revenue fund. The bill also contains rulemaking authority for the Department of Revenue and a nonseverability clause tied to administrative rule review provisions.
In practical terms, SB 27 would affect Missouri taxpayers, the Department of Revenue, and certain colleges or universities with endowments that meet the bill’s definition of a qualifying institution. It would lower individual income tax rates over time if revenue conditions are met, while potentially increasing state revenue through the new endowment tax. The bill would also require administrative changes to tax tables, bracket calculations, and enforcement procedures.
The overall sentiment reflected in the available record is limited, because there are no committee transcripts or recorded votes included with the bill materials. Based on the bill text alone, the measure appears to combine a tax-cut framework with a targeted tax on institutions connected to abortion services, suggesting a policy approach aimed at both reducing income taxes and penalizing certain higher-education institutions. Without discussion or vote history, there is no direct evidence of support or opposition in the record provided.
The main point of contention likely centers on the new endowment tax and the bill’s abortion-related definition of a qualifying institution. That provision could draw objections from higher-education institutions, abortion-rights advocates, and opponents of viewpoint- or conduct-based taxation, while supporters may view it as a way to hold institutions financially accountable for abortion-related affiliations. The income tax reduction provisions may be more broadly popular, but they are conditioned on revenue growth thresholds, which could also raise concerns about fiscal impact and predictability.
SB 27 would amend Missouri’s income tax law by replacing section 143.011 and changing the state’s rate structure to allow staged reductions in the top individual income tax rate, subject to revenue triggers and inflation adjustments. It would also add a new section, 146.200, imposing a 1.9 percent tax on the endowment assets of certain higher-education institutions defined by abortion-related affiliations or activities. The bill would require the Department of Revenue to promulgate rules, adjust tax tables, and administer both the income tax changes and the new endowment tax, with all resulting revenue from the endowment tax deposited into the general revenue fund.
No committee testimony or vote history was provided, so the record does not show formal support or opposition. From the bill text, the measure appears to blend a generally favorable tax-reduction proposal with a controversial targeted tax on institutions tied to abortion services, which suggests mixed sentiment: likely support from proponents of tax cuts and abortion restrictions, and likely opposition from affected universities, abortion-rights advocates, and critics of the targeted tax structure.
The most notable contention is the new endowment tax in section 146.200, especially the definition of a “qualifying institution of higher education,” which turns on affiliation with abortion facilities, abortion training, or support for abortion providers. That language is likely to be disputed by colleges, medical training programs, and abortion-rights groups. A second area of potential debate is the income tax reduction mechanism, because the rate cuts depend on revenue growth thresholds and could affect state budget planning and future revenue stability. The Department of Revenue’s rulemaking authority and the bill’s nonseverability clause may also draw attention from lawmakers concerned about administrative discretion and legal durability.