Missouri State Taxes

Staff Reports
by Staff Reports

 


Missouri State Tax ― Individual Income Tax

Missouri’s individual income tax rates (for single filers) are as follows:

  • 1.5% on taxable income of $1,000 or less
  • 2% on taxable income between $1,001 and $2,000
  • 2.5% on taxable income between $2,001 and $3,000
  • 3% on taxable income between $3,001 and $4,000
  • 3.5% on taxable income between $4,001 and $5,000
  • 4% on taxable income between $5,001 and $6,000
  • 4.5% on taxable income between $6,001 and $7,000
  • 5% on taxable income between $7,001 and $8,000
  • 5.5% on taxable income between $8,001 and $9,000
  • $315 plus 6% on taxable income of $9,001 or more

Federal AGI (adjusted gross income) is the starting point for calculating Missouri taxable income. This means that the federal tax return must be filled out before beginning the Missouri tax return.

An individual must file a state tax return if their Missouri AGI exceeds a certain level, based on filing status. You must file a return if you are:

  • “Single” with Missouri AGI of $7,800 or more
  • “Single” (over 65) with Missouri AGI of $9,200 or more
  • “Married Filing Jointly” with Missouri AGI of $15,600 or more
  • “Married Filing Jointly” (one over 65) with Missouri AGI of $20,900 or more
  • “Married Filing Jointly” (both over 65) with Missouri AGI of $17,800 or more
  • “Head of Household” with Missouri AGI of $11,850 or more
  • “Head of Household” (over 65) with Missouri AGI of $13, 250 or more
  • “Married Filing Separately” with Missouri AGI of $2,100 or more

The City of St. Louis and Kansas City both impose a “city earnings tax.” These taxes are not collected by the Missouri Department of Revenue, although the amount paid may have to be reported on the state tax form.

Missouri’s individual income tax return is due by April 15th following the end of the taxable year (for calendar year filers). If you cannot file by the due date, you may request an extension of time to file by using Form MO-60 (Application for Extension of Time to File). This form, along with any expected taxes due, must be submitted to the Department of Revenue by the original due date (April 15) or penalties will apply. Missouri also grants an automatic extension of time to file to any individual who has a federal tax extension.

Missouri State Tax ― Corporate Tax

Corporation Income Tax
This tax is imposed on the net income made by a corporation during the tax year. Only income earned in Missouri is considered taxable, and businesses may deduct a portion (50%) of Federal income tax payments before computing Missouri taxable income. Missouri’s corporation income tax has a rate of 6.25% on net taxable income earned by a corporation in the state.

Corporation Franchise Tax
Despite how it sounds, the corporation franchise tax is not a tax on franchises. It is a business tax on assets that corporations pay in advance for doing business in Missouri. Only corporations with more than $1,000,000 worth of assets (in or apportioned to Missouri) must pay a tax; however, all corporations are required to file a return even if no tax is due. Missouri’s corporation franchise tax is imposed at a rate of 1/30th of 1% (or 0.0333%) of taxable capital.

Financial Institutions Tax
This tax is imposed on banks and trust companies, credit institutions, savings and loan associations, and credit unions. It has a rate of 7% on net income.

Partnership Tax
A partnership tax return must be filed by any partnership that has either of the following:
• A partner who is a Missouri resident
• Any income derived from Missouri sources

S Corporation Income Tax
An S corporation tax return must be filed by any S corporation that files IRS Form 1120S (U.S. Income Tax Return for an S Corporation) and has either of the following:
• A shareholder who is a Missouri resident
• Any income derived from Missouri sources

Missouri State Tax ― Sales & Use Tax

The sales and use tax is made up of two components: the sales tax and the use tax. The sales tax is the main (better-known) component that applies to the retail sales of taxable goods and services. The use tax is imposed on the use or storage of taxable items when sales tax was not properly collected. These two taxes are complementary ― meaning that a transaction is subject to one or the other, but not both. Missouri imposes a state sales/use tax rate of 4.225%.

In addition to the state sales/use tax, counties, cities, and special districts may impose their own rates as well. This results in combined state and local tax rates that vary depending on the location of the seller.

Sales Tax
All sales of tangible personal property and taxable services are subject to Missouri sales tax, unless specifically exempted by law. The state sales tax rate is 4.225% for most items; however, Missouri does impose a reduced tax rate of 1.225% on certain food sales (a 3% reduction from the general tax rate). Domestic utility sales (e.g., sales of electricity, metered water service, gas, etc.) are exempt from state sales tax but are subject to local sales tax rates. Sales tax is the responsibility of the vendor to collect from customers and remit to the Department of Revenue.

Use Tax
Missouri’s use tax is imposed on the use, storage, or consumption of tangible personal property in the state. The state use tax rate is 4.225% (same as the sales tax rate), and additional local rates may also apply. Use tax typically affects purchases made from out-of-state, over the Internet, or via mail-order catalogue. The tax is activated when purchased items, for which no sales tax has been collected, are brought into Missouri. If an out-of-state seller does not collect sales/use tax from the consumer, the consumer is personally liable for reporting and paying it directly to the Department of Revenue.

Missouri State Tax ― Property Tax

Property tax in Missouri is a local tax ― while property tax policies are determined at the state level, taxes are enforced and collected by local governments. The State Tax Commission is the agency which oversees property assessment and appeals.

There are two mains types of property: real property and personal property. Real property (i.e. real estate) is land and anything built, growing, or installed on that land. It also includes any right/privilege associated with the ownership of land. Personal property is all property that is not real property and is not permanently affixed to real estate. Personal property can be tangible (cars, trucks, boats, machinery) or intangible (stocks, bonds, notes).

Certain types of real property are exempt from tax, including property owned by governments and property used exclusively for religious, educational, and charitable purposes. Certain types of personal property are also exempt from tax, including household goods, inventories, clothing, and other personal items.

County assessors use 3 main techniques to determine the value of real property.

  • Cost Approach ― Estimates the value of the land (as if vacant) and considers the cost of replacing the current structure with one of similar construction and amenities
  • Market Approach ― Also called the sales comparison approach, this method evaluates property by comparing similar properties that have recently sold (often used for residential property)
  • Income Approach ― Estimates a property’s value by determining its income-producing potential (often used for apartments, office buildings and shopping centers)

Property taxes are based on assessed value. A property’s assessed value is a percentage of its market value (which is determined by the county assessor) based on the classification of the property and its use.

Property owners who disagree with their assessments may make an appeal:

  • Informal appeals ― Contact the county assessor’s office and set up an informal meeting to discuss the assessment
  • County Board of Equalization ― If the informal meeting does not settle the issue, a formal appeal can be made to the county board of equalization to schedule a hearing
  • State Tax Commission ― If still unsatisfied with the assessment, the property owner may appeal to the State Tax Commission

Missouri State Tax Forms

Form MO-1040A (Missouri Individual Income Tax Return – Short Form)
Form MO-1040 (Missouri Individual Income Tax Return – Long Form)
Form MO-1040P (Missouri Individual Income Tax Return and Property Tax Credit Claim/Pension Exemption – Short Form)
Form MO-PTC (Property Tax Credit Claim)
Form MO-PTS (Property Tax Credit)
Form MO-CRP (Certification of Rent Paid for 2009)
Form MO-A (Individual Income Tax Adjustments)
Form MO-NRI (Missouri Income Percentage)
Form MO-1040V (Individual Income Tax Payment Voucher)
Form MO-1040ES (Estimated Tax Declaration for Individuals)
Form MO-60 (Application for Extension of Time to File)
Form 4340 (Individual Consumer’s Use Tax Return)
Form MO-1120 (Missouri Corporation Income Tax/Franchise Tax Return)

Missouri State Tax Resources

Missouri Department of Revenue: dor.mo.gov

Search for Missouri individual income tax forms (current & previous years): dor.mo.gov/forms

Missouri Individual Income Tax Calculator: dor.mo.gov/calculators/incometax

File Online at Missouri’s “Personal Tax Electronic Filing” center: dor.mo.gov/personal/electronic

Pay Missouri Individual Income Taxes Online: dor.mo.gov/personal/payonline

The “Missouri Return Inquiry System” lets taxpayers check the status of their refund: dors.mo.gov/tax/taxinq

Missouri Department of Revenue, Department of Labor & Industrial Relations “Online Business Registration:” dors.mo.gov/tax/coreg

File and Pay Business Taxes Online: dor.mo.gov/business/payonline

“Property Tax Appeals Before the State Tax Commission of Missouri” brochure: oa.mo.gov/stc/appeals_brochure

State Tax Commission of Missouri: oa.mo.gov/stc

Missouri State Assessors Association: www.moassessorsassn.org

Missouri Association of Counties: www.mocounties.com

Missouri State Treasurer: www.treasurer.mo.gov