MO HB3405

Amends Missouri's SALT Parity Act (section 143.436) governing pass-through entity taxation for partnerships and S corporations doing business in Missouri

For tax years ending on or after December 31, 2026, changes the income calculation method to decrease taxable income by 20% of ordinary business income reported on federal Forms 1065 or 1120-S, replacing the current percentage deduction based on section 143.022

For tax years beginning on or after January 1, 2027, converts the existing tax credit for members to a deduction from Missouri adjusted gross income, calculated by dividing the member's pro rata share of entity-level tax paid by the highest individual tax rate

Members who file an opt-out election become ineligible for any tax credits or deductions resulting from tax years when the opt-out is effective

Modifies the opt-out election deadline to the earlier of the return due date (without extensions) or actual filing date of the affected business entity's return