HB 480 -- Taxation:  Food and the Federal Income Tax Deduction

Co-Sponsors:  Thompson, Fraser, Boucher, Rizzo, Jolly

Under current law, certain food types are taxable for local
sales tax purposes.  This bill exempts these food types from all
local sales taxes imposed by political subdivisions.  This
portion of the bill will become effective on July 1 following
the passage of the bill by the voters of the state.

The bill also reduces the maximum federal income tax paid
deduction allowed for individuals for state income tax
purposes.  The maximum individual income tax deduction for
federal income taxes paid will be reduced from $5,000 for a
single taxpayer and $10,000 for married taxpayers to $3,000 and
$6,000, respectively.  This portion of the bill will become
effective on January 1 following the passage of the bill by the
voters of the state.

All state revenue received from the reduction of the federal
income tax deduction on individuals will be deposited into an
account to be known as the Local Revenue Replacement Fund.
Moneys in this fund will be disbursed to political subdivisions
in an amount necessary to replace the lost revenues of the
political subdivisions as a result of the local sales tax
exemption on the sales of certain food types.  The fund and
disbursement of the moneys will be administered by the
Department of Revenue.

The bill also holds harmless deposits into the Outstanding
Schools Trust Fund.

The bill contains a referendum clause.

Missouri House of Representatives
Last Updated September 13, 2001 at 2:02 pm