SCS SB 310 -- WITHHOLDING TAXES ON RETIREMENT BENEFITS

SPONSOR:  Champion (Dixon)

COMMITTEE ACTION:  Voted "do pass" by the Committee on Ways and
Means by a vote of 15 to 0.

This substitute requires the withholding of state income taxes on
retirement income including entities outside Missouri.
"Retirement income" is defined as any annuity, pension, or
retirement allowance as defined in subsection 1 of Section
143.124, RSMo.  A taxpayer can request additional withholding or,
upon written notification, may elect to have nothing withheld
from their retirement income.  The administration, collection,
and enforcement of the withholding tax will be done in the same
manner as any employer withholds income taxes.

FISCAL NOTE:  No impact on state funds in FY 2006, FY 2007, and
FY 2008.

PROPONENTS:  Supporters say that the bill mandates withholding of
an income tax so that a Missouri resident with a retirement
account in, for example, Pennsylvania can have taxes withheld on
their pension.

Testifying for the bill was Senator Champion.

OPPONENTS:  There was no opposition voiced to the committee.

OTHERS:  Others testifying on the bill say retirement funds
coming from other states may or may not have taxes withheld since
Missouri does not require it.  The taxpayer must do estimated
payments if it is not done, and a tax liability is due at the end
of the year to prevent penalties.  The bill requires a taxpayer
to fill out a form if they do not want taxes withheld on their
retirement funds.  This puts the power in the hands of the
taxpayer.

Others testifying on the bill was Department of Revenue.

Karla Strobel, Legislative Analyst

Missouri House of Representatives
93rd General Assembly, 1st Regular Session
Last Updated August 25, 2005 at 1:21 pm