April 11, 2025

Missouri Senate Advances Capital Gains Tax Cut with “Circuit Breaker” Amendment

This week, the Missouri Senate advanced HB 594/508, sponsored by Rep. Chad Perkins (R-Bowling Green) that would eliminate the state tax on capital gains.  The measure passed the Senate on a bi-partisan basis, 27-6, with four Democrats joining their Republican colleagues in support of the bill.  

On the Senate floor, amendments were added to the bill that revise the “circuit breaker”, a tax credit that benefits senior citizens.  This credit, unrelated to the capital gains tax, allows seniors below certain income levels to claim a state tax credit for property taxes paid on their homes.  The credit benefits both homeowners and renters, who can claim a portion of their rent as property tax.  The circuit breaker program was revised to increase the amount of income seniors can claim while still qualifying for the credit, as well as increase the amount of the actual credit.  The credit provides much-needed relief for seniors on fixed incomes that helps pay for medication and other expenses.  

HB 594/508 was also amended to include language banning sales taxes on infant and adult diaper products, female hygiene products, and certain broadband equipment. The cost of the entire bill is estimated to be between $300-400 million dollars annually, according to the fiscal note that accompanies the bill.  Over the years, Catholic Charities has supported these kinds of revisions to the circuit breaker tax credit, as it is a benefit to seniors that allows them to remain in their homes in the community.  The bill awaits a final vote in the House before going to the Governor for his signature.

U.S. Senate Passes Framework for Extending 2017 Tax Cuts

Late last week, the U.S. Senate passed its version of a framework for budget negotiations, agreeing to an extension of the 2017 tax cuts due to expire on December 31st.  The Senate version of the package differs from the House version, which requires a minimum of $1.5 trillion in spending cuts over ten years to offset the $4+ trillion price tag of the tax break extension. 

While the Senate version contemplates $2 trillion in spending cuts with the possibility of up to $4 trillion in cuts, it makes no firm commitment to any cuts.  Rather, it leaves that decision to future negotiations.  Several House members have insisted that decisions on cuts be made as part of the “framework” for them to support the Senate version.  Be on the lookout for future alerts about spending cuts, as they will certainly be discussed in the coming months. Thanks to those who reached out to the Missouri Senate delegation last week to express concerns about cuts to Medicaid and other social programs.

Deacon Tyler