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History of MO Taxes

Written by Dr. Isabel Warner
Published on May 10, 2024
Research Highlights

Income taxes, sales and use taxes, and corporate income taxes made up 91% of the General Revenue (GR) in 2023.

Income taxes historically make up the majority (63-70%) of GR, while corporate taxes make up 1-2%.

Local tax rates on sales and food have increased in the past decade, as corporate tax rates and top-earner income tax rates decrease at the state level.

MO has three main sources of tax revenue: individual income, corporate income, and sales & use tax.

In 2023, income taxes, sales and use taxes, and corporate income taxes made up 24% of the state’s total budget and 91% of General Revenue (GR) funds (MO Senate, 2022). The remaining 9% of GR came from other sources and carryover from previous years.

Nearly half of the 2024 MO budget is from federal funds. Between 2003 and 2024, the share of the state general revenue has decreased from 42% of the MO budget to 29% (MO House, 2023; MO House, 2002). Over that same period, the portion of the state budget derived from federal funds has increased from 30% to 47%. Other specific use taxes, such as highway and transportation, make up the final third of the budget and have remained relatively stable.

Since 2018 MO has reduced its corporate and individual income tax rates.  

In 2018, MO began to reduce both the individual and corporate income tax rates (MO Senate, 2018, Figure 1). The top income tax rate (earned income above $8,499 per year in 2023), was reduced incrementally from 6% in 2017 to 4.95% in 2023 (MO Department of Revenue, 2017). In addition, the income tax rate for the lowest income bracket (earnings between $1,207 and $2,414 per year in 2023) was increased from 1.5% to 2% in 2023 (MO Department of Revenue, 2023; MO Department of Revenue, 2022). Income taxes have decreased as a portion of the total budget, from 37% in 2004 to 25% in 2023. However, income taxes consistently make up 63-70% of GR over the 2004-2023 period (MO Senate, 2017). Currently, income taxes account for 63% of GR.

Corporate income tax rates were reduced in 2017 from 6.25% to 4% (MO Department of Revenue, 2023; MO Department of Revenue, 2017). The share of corporate income taxes has decreased in the MO budget since 2004, from 2.3% to 1.3% in 2023 (MO Senate, 2022; MO Senate, 2004). As a proportion of GR, corporate income taxes have decreased from 5.7% to 4.7%.

Since 2015 tax burdens have shifted to local jurisdictions.

MO has maintained a steady sales & use tax rate of 4.225% (MO Department of Revenue, personal communication) and is decreasing corporate and high-earner income tax rates. Meanwhile, local jurisdictions are increasing sales & use, and food & use tax rates (MO Department of Revenue, 2024). On top of the state rate, jurisdictions are requiring an additional 0.5-7.8% of local sales & use taxes, and the average local has increased from 2.8% to 3.8% since 2013. The average food tax rate has also increased from 4% to 4.9% over the past decade, and food use taxes have increased from 1.8% to 3% over the same period.

 

Figure 1: Missouri GR fund sources and tax rates. The bars represent sources of General Revenue (GR) as a portion of the total GR in each fiscal year (left axis) adjusted for inflation (MO State Tax Commission, 2024; STL Fed, 2024). The lines show the tax rates for these income sources. Data was collected from the MO Senate Annual Fiscal Reports (2004-2022), the Missouri Department of Revenue Income Tax and Corporate Income Tax forms (2005-2023), and the Missouri Department of Revenue’s Sales/Use Tax Rate Tables (2005-2023).
 

References:

Missouri Department of Revenue (2013). Tax Chart.

https://taxsim.nber.org/historical_state_tax_forms/MO/2013/2013%20Tax%20Table_2013.pdf

Missouri Department of Revenue (2014). Tax Chart.

https://dor.mo.gov/forms/2014%20Tax%20Chart_2014.pdf

Missouri Department of Revenue (2015). Tax Chart.

https://dor.mo.gov/forms/2015%20Tax%20Chart_2015.pdf

Missouri Department of Revenue (2016). Tax Chart.

https://dor.mo.gov/forms/2016%20Tax%20Chart_2016.pdf

Missouri Department of Revenue (2017). Tax Chart.

https://dor.mo.gov/forms/2017%20Tax%20Chart_2017.pdf

Missouri Department of Revenue (2018). Tax Chart.

https://dor.mo.gov/forms/2018%20Tax%20Chart_2018.pdf

Missouri Department of Revenue (2019). Tax Chart.

https://dor.mo.gov/forms/2019%20Tax%20Chart_2019.pdf

Missouri Department of Revenue (2020). Tax Chart.

https://dor.mo.gov/forms/2020%20Tax%20Chart_2020.pdf

Missouri Department of Revenue (2021). Tax Chart.

https://dor.mo.gov/forms/2021%20Tax%20Chart_2021.pdf

Missouri Department of Revenue (2022). Tax Chart.

https://dor.mo.gov/forms/2022%20Tax%20Chart_2022.pdf

Missouri Department of Revenue (2023). Tax Chart.

https://dor.mo.gov/forms/2023%20Tax%20Chart_2023.pdf

Missouri Department of Revenue (2024). Sales/Use Tax Rate Tables.

https://dor.mo.gov/taxation/business/tax-types/sales-use/rate-tables/

Missouri Department of Revenue (2007). Corporate Income Tax Form. MO-1120.

https://dor.mo.gov/forms/MO-1120_2007.pdf

Missouri Department of Revenue (2008). Corporate Income Tax Form. MO-1120.

https://dor.mo.gov/forms/MO-1120_2008.pdf

Missouri Department of Revenue (2009). Corporate Income Tax Form. MO-1120.

https://dor.mo.gov/forms/MO-1120_2009.pdf

Missouri Department of Revenue (2010). Corporate Income Tax Form. MO-1120.

https://dor.mo.gov/forms/MO-1120_2010.pdf

Missouri Department of Revenue (2011). Corporate Income Tax Form. MO-1120.

https://dor.mo.gov/forms/MO-1120_2011.pdf

Missouri Department of Revenue (2012). Corporate Income Tax Form. MO-1120.

https://dor.mo.gov/forms/MO-1120_2012.pdf

Missouri Department of Revenue (2013). Corporate Income Tax Form. MO-1120.

https://dor.mo.gov/forms/MO-1120_2013.pdf

Missouri Department of Revenue (2014). Corporate Income Tax Form. MO-1120.

https://dor.mo.gov/forms/MO-1120_2014.pdf

Missouri Department of Revenue (2015). Corporate Income Tax Form. MO-1120.

https://dor.mo.gov/forms/MO-1120_2015.pdf

Missouri Department of Revenue (2016). Corporate Income Tax Form. MO-1120.

https://dor.mo.gov/forms/MO-1120_2016.pdf

Missouri Department of Revenue (2017). Corporate Income Tax Form. MO-1120.

https://dor.mo.gov/forms/MO-1120_2017.pdf

Missouri Department of Revenue (2018). Corporate Income Tax Form. MO-1120.

https://dor.mo.gov/forms/MO-1120_2018.pdf

Missouri Department of Revenue (2019). Corporate Income Tax Form. MO-1120.

https://dor.mo.gov/forms/MO-1120_2019.pdf

Missouri Department of Revenue (2020). Corporate Income Tax Form. MO-1120.

https://dor.mo.gov/forms/MO-1120_2020.pdf

Missouri Department of Revenue (2021). Corporate Income Tax Form. MO-1120.

https://dor.mo.gov/forms/MO-1120_2021.pdf

Missouri Department of Revenue (2022). Corporate Income Tax Form. MO-1120.

https://dor.mo.gov/forms/MO-1120_2022.pdf

Missouri Department of Revenue (2023). Corporate Income Tax Form. MO-1120.

https://dor.mo.gov/forms/MO-1120_2023.pdf

Missouri House of Representatives (2002). 2002 Budget Fast Facts: Fiscal Year 2003.

https://house.mo.gov/AppropriationNotes.aspx?fileid=162

Missouri House of Representatives (2023). 2023 Budget Fast Facts: Fiscal Year 2024.

https://house.mo.gov/AppropriationNotes.aspx?fileid=391

Missouri Senate (2004). Annual Fiscal Report (Red Book).

https://www.senate.mo.gov/04info/redbook04.pdf

Missouri Senate (2005). Annual Fiscal Report (Red Book).

https://www.senate.mo.gov/05info/redbook05.pdf

Missouri Senate (2006). Annual Fiscal Report (Red Book).

https://www.senate.mo.gov/06info/redbook06.pdf

Missouri Senate (2007). Annual Fiscal Report (Red Book).

https://www.senate.mo.gov/07info/redbook07.pdf

Missouri Senate (2008). Annual Fiscal Report (Red Book).

https://www.senate.mo.gov/08info/redbook08.pdf

Missouri Senate (2009). Annual Fiscal Report (Red Book).

https://www.senate.mo.gov/09info/redbook09.pdf

Missouri Senate (2010). Annual Fiscal Report (Red Book).

https://www.senate.mo.gov/10info/redbook10.pdf

Missouri Senate (2011). Annual Fiscal Report (Red Book).

https://www.senate.mo.gov/11info/redbook11.pdf

Missouri Senate (2012). Annual Fiscal Report (Red Book).

https://www.senate.mo.gov/12info/redbook12.pdf

Missouri Senate (2013). Annual Fiscal Report (Red Book).

https://www.senate.mo.gov/13info/2013redbook.pdf

Missouri Senate (2014). Annual Fiscal Report (Red Book).

https://www.senate.mo.gov/14info/2014redbook.pdf

Missouri Senate (2015). Annual Fiscal Report (Red Book).

https://www.senate.mo.gov/15info/2015redbook.pdf

Missouri Senate (2016). Annual Fiscal Report (Red Book).

https://www.senate.mo.gov/16info/2016redbook.pdf

Missouri Senate (2017). Annual Fiscal Report (Red Book).

https://www.senate.mo.gov/17info/2017redbook.pdf

Missouri Senate (2018). Annual Fiscal Report (Red Book).

https://www.senate.mo.gov/18info/2018redbook.pdf

Missouri Senate (2019). Annual Fiscal Report (Red Book).

https://www.senate.mo.gov/19info/2019redbook.pdf

Missouri Senate (2020). Annual Fiscal Report (Red Book).

https://www.senate.mo.gov/20info/2020redbook.pdf

Missouri Senate (2021). Annual Fiscal Report (Red Book).

https://www.senate.mo.gov/21info/2021redbook.pdf

Missouri Senate (2022). Annual Fiscal Report (Red Book).

https://www.senate.mo.gov/22info/2022redbook.pdf

Missouri State Tax Commission (2024). Consumer Price Index.

https://stc.mo.gov/clerks/consumer-price-index/

St. Louis Federal Reserve Bank (2024). Adjusting for Inflation.

https://research.stlouisfed.org/publications/page1-econ/2023/01/03/adjusting-for-inflation

Tax Foundation (2012). State Individual Income Tax Rates.  Link.

 

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