HB 2502 Summary

• Enacts the Multistate Tax Compact into law to establish uniform procedures for tax administration, apportionment of income, and resolution of tax disputes among states

• Modifies Missouri income tax rates and brackets: reduces the lowest bracket from 1.5% to 2% and adjusts upper brackets; requires annual inflation adjustments to tax brackets beginning in 2020

• Eliminates deduction and retention percentages that employers and vendors could previously claim when remitting withheld income taxes and sales taxes to the state

• Creates a new Missouri Earned Income Tax Credit equal to 20% of the federal earned income tax credit for eligible resident individuals beginning in 2019

• Updates references throughout taxation statutes to reflect section number changes (143.261 to 143.265) and makes technical corrections including gender-neutral language changes

• Effective date: January 1, 2019