JEFFERSON CITY — Older Missourians could be in line for tax breaks under a series of proposals introduced in the state Legislature.
As lawmakers ramp up work in their annual session, at least eight bills have emerged that would either reduce or freeze property taxes for homeowners older than 65.
It’s not the first time such plans have been floated, but the ideas could see renewed interest at a time when the state is flush with cash. House Speaker Dean Plocher, R-Des Peres, suggested last week that tax cuts could be in the offing in the coming months.
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Any changes in state tax policy would come in the wake of an election-year income tax cut that went into effect Jan. 1. The decision to reduce the state’s top marginal individual income tax rate to 4.95% down from 5.3% is estimated to cost the state $500 million in revenue.
Among the plans is a proposal to exempt Social Security benefits from Missouri’s income tax.
Missouri is among just 11 states that tax Social Security benefits. Sen. Tony Luetkemeyer, R-Parkville, wants to allow all Missourians to deduct 100% of their benefits, beginning in 2024.
“Missouri’s seniors, many of whom are on fixed incomes, should not have their Social Security benefits taxed. My legislation keeps seniors from having to hand over more money to government,†Luetkemeyer said.
Also in the mix is a proposed constitutional amendment by Sen. Steve Roberts, D-ºüÀêÊÓƵ. His proposal would allow a county to exempt taxpayers age 65 or older from increases in the assessed valuation of their property.
An identical measure won Senate approval last year, but failed to advance in the full House before lawmakers adjourned last May.
The overall cost of Roberts’ proposal was not clear last year after state tax officials said they did not have the data to determine how many of the more than 1 million Missourians over age 65 would be eligible for the freeze or how many of the state’s 2,900 taxing bodies would choose to participate.
ºüÀêÊÓƵ officials, however, said the passage of the cut would have a negative effect on the city’s revenue.
According to a cost analysis, the city would see a $121,168 drop in revenue based on 2019 property tax collections.
In addition, the city assessor’s office said tracking different tax rates for different owners based on their age would likely be a “massive programming challenge†that could cost $100,000 in changes to the computer system.
The proposal also could cause heartburn among ºüÀêÊÓƵ County officials, who have grappled with a budget deficit despite an influx of federal pandemic relief aid.
Meanwhile, Sen. Mike Cierpiot, D-Lee’s Summit, wants to give certain low-income senior citizens and disabled veterans an income tax credit to offset property taxes or rental costs.
In the House, Rep. Marlene Terry, D-Bellefontaine Neighbors, is sponsoring a constitutional amendment asking voters if they want to give seniors and disabled homeowners a 50% break on their property taxes.
Terry’s proposal is among at least three others in the Legislature’s lower chamber that would freeze or lower property taxes for people over 65.