New Bill Makes Residents of This State Exempt From Social Security Taxes — What Are the Conditions?
Among the 31 bills signed into law by Missouri Governor Mike Parson on July 6 was Senate Bill 190 (SB 190), which decrees that the state will no longer tax Social Security and public pension payments for the tax year beginning in January 2024.
Currently, Missouri residents only pay taxes on Social Security if they make more than $85,000 a year (or more than $100,000 a year if married). Lawmakers extended this tax break to all seniors by approving SB 190. Missouri is one of 11 states that taxes Social Security benefits.
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The bill also includes provisions making the state’s seniors exempt from rate hikes on property taxes, with counties now responsible for granting property tax credits for seniors. However, the pause on property tax rates would only apply to the primary residences of people aged 65 and older, according to the Associated Press.
SB 190’s passing comes as many Missourians are seeing severe increases in 2023 property value assessments, which form the basis of property tax rates. Assessment hikes resulting from the state’s real estate market boom has lead homeowners to seek opportunities to lower their property tax bills through the appeal process.
Although it passed through the Republican-led House 154-2, representatives from both parties expressed apprehension about the bill, with most naysayers blaming the governor’s broad fiscal policies for the substantial decrease in state revenues moving forward.
Closing out all remaining bills from the 2023 session, Parson cited the tax cut as a necessary piece of legislation and a reason he vetoed many of the 201 line items he axed from the state budget for the upcoming year, according to the Missouri Independent. The bill is expected to reduce state revenue by over $300 million annually.
According to the Missouri Independent, in an interview last week, Senate Appropriations Committee Chairman Lincoln Hough (R-Springfield) chimed in on general revenue losses and Governor Parson’s spending cuts, stating, “Maybe the governor’s concerned about what possible further tax reductions that the legislature may be looking at, but that’s not necessarily how you build this budget.”
A number of Democrats, including Rep. Peter Merideth (D-St. Louis), seemed to regard the final bill as an inevitable compromise.
“I was not thrilled with it,” Merideth said. “But honestly, to me, it was the best of the options presented … Many of us agree that there is a real problem with seniors right now that are on fixed incomes dealing with inflation and property taxes are a big part of that.”
“It helps some of our seniors who need that help, and it helps all of the rest of them who don’t need this at all,” said Rep. Deb Lavender (D-Manchester), according to the AP. “We don’t have anything in place to replenish that revenue that we’re cutting out of our income levels for us to be able to have the ability to spend in the future.”
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