MO SB1237

Establishes a flat 4% income tax rate for all Missouri residents beginning January 1, 2027, replacing the current graduated tax bracket system that ranges from 1.5% to 6%

Maintains the existing top rate of 4.95% for tax years 2023 through 2026 as a transitional measure before the flat tax takes effect

Allows for additional rate reductions of 0.1% per year starting in 2028 if net general revenue exceeds the highest collection from the prior three fiscal years by at least $120 million (adjusted for inflation)

Eliminates the federal income tax deduction for both individual and corporate taxpayers beginning January 1, 2027

Exempts the first $1,000 of taxable income from state income tax for all tax years beginning on or after January 1, 2027