HB 1251 -- Taxation:  Food and the Federal Income Tax Deduction

Sponsor:  Thompson

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 the 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 contains a referendum clause.

Missouri House of Representatives
Last Updated October 11, 2002 at 9:00 am