During the Springfield Area Chamber of Commerce’s annual State of the State, Governor Mike Parson announced that Missouri’s robust economy and continued revenue strength have triggered an additional income tax cut under Senate Bills (SB) 3 & 5, approved by Governor Parson in 2022. This income tax cut lowers Missouri’s top income tax rate to 4.7 percent, marking a more than 20 percent decrease in Missourians’ income tax burdens during the Parson Administration.
Even before this income tax cut, Missouri was ranked 11th for the lowest tax burden in the nation, including both state and local taxes, by U.S. News.
SBs 3 & 5, passed by the General Assembly and signed by Governor Parson after his special session call in 2022, included additional 0.1 percentage point income tax cut triggers when general revenue increased by $200 million, adjusted for inflation, in a given fiscal year (FY). Net general revenue collections grew by $322.6 million from FY23 to FY24. As a result, Missouri’s top income tax rate will be cut from 4.8 percent to 4.7 percent, effective January 1, 2025.
This action marks the fifth income tax cut Governor Parson has implemented during his time in office and a 1.2 percentage point total reduction: 0.5 in 2019, 0.1 in 2022, 0.35 in 2023, 0.15 in 2024, and 0.1 in 2025.
Missourians’ income tax burdens have now been reduced by more than 20 percent since Governor Parson took office. This was achieved at the same time Missouri’s economy earned record wins during the Parson Administration:
- 1st in the nation for job growth in 2024
- More than 175,000 jobs added to Missouri’s economy since June 2018
- Outpacing all neighboring states in manufacturing job growth
- The lowest unemployment rate ever recorded at 2.1 percent in April 2022
- Six consecutive years of Missouri’s unemployment rate below the national average
- 61 months of positive job growth, despite a global pandemic
- $1.9 billion left on the bottom line thanks to conservative and balanced budgets year after year
- AAA credit rating maintained all six years
- 40 percent general revenue growth driven by sales tax collections (Missourians spending their own money)
Note: Section 143.011, RSMo defines net general revenue collected as all revenue deposited into the general revenue fund, less refunds and revenues originally deposited into the general revenue fund but designated by law for a specific distribution or transfer to another state fund.
