On July 5, 2018, Missouri Governor Mike Parson signed Senate Bill 769. This bill makes a couple of tax changes that are applicable to banks, thrifts, and credit institutions. First, the bill provides that for all tax years beginning in a calendar year in which there is a reduction in the rate of tax imposed under the corporate income tax law, there shall be a corresponding and proportional reduction in the rate of franchise tax imposed on banks, thrifts, and credit institutions. The reduced rate will be the applicable rate in each subsequent calendar year. The corresponding and proportional reduction will occur each year there is a reduction in the rate of tax imposed under the corporate income tax law, including a reduction in the rate of tax by operation of another law or by the constitution. Under current law, Missouri’s corporate income tax rate is scheduled to drop 36 percent from 6.25 percent to 4.0 percent for all tax years beginning on or after January 1, 2020. Thus, the current 7.0 percent franchise tax rate applicable to banks, thrifts and credit institutions should likewise be reduced by 36 percent to 4.48 percent beginning for the same period.
Senate Bill 769 also clarifies that any entity not subject to the tax on corporations will not be required to complete or file any document or return related to corporate income taxes. Please contact Derek Love at 816-802-5220 with questions on Senate Bill 769.