MO SB661

Creates a new individual income tax deduction for business income that phases in from 5% (tax year 2012) to 25% (tax year 2016 and beyond), allowing individual taxpayers to subtract a portion of business income from Missouri adjusted gross income.

Reduces the corporate income tax rate from 6.25% (pre-2012) to 3.125% over five years, with intermediate rates of 5.625% (2012), 5% (2013), 4.375% (2014), and 3.75% (2015).

Defines "business income" as income greater than zero from regular trade or business transactions, excluding compensation as defined in section 32.200, and includes income from tangible property that is integral to business operations.

Allows shareholders of small corporations and partners in partnerships to claim a proportional share of the business income deduction based on their ownership percentage on the last day of the tax period.