Tax Foundation figures show Missouri's changes make the state more business-friendly

In 2018, Missouri adopted individual and corporate income tax reforms to be phased in over time.

The fruits of those changes have improved the Show Me State's national ranking on corporate taxes from fifth to third. Overall, Missouri moved up three spots to 12th in the Tax Foundation's 2021 State Business Tax Climate Index (SBTC).

Individual

In 2019, Missouri saw a notable drop in the top individual income tax rate from 5.9% to 5.4%, with smaller triggered reductions scheduled for future years until the rate declines to 5.1%.

Corporate

In 2020, the corporate income tax reform package went into effect. Missouri no longer gives companies the option of choosing the apportionment formula most favorable to them.

The consolidation into a single apportionment formula paid down a significant corporate income tax reduction, from 6.25% to 4%.

Top 10

The absence of a major tax is a common factor among many of the top 10 states on the SBTC Index, according to www.taxfoundation.org.

Property taxes and unemployment insurance taxes are levied in every state, but there are several states that do without one or more of the major taxes: the corporate income tax, the individual income tax or the sales tax.

Nevada, South Dakota, and Wyoming have no corporate or individual income tax (though Nevada imposes gross receipts taxes). Alaska has no individual income or state-level sales tax. Florida has no individual income tax and New Hampshire and Montana have no sales tax.

The top 10 on the SBTC Index are Wyoming, South Dakota, Alaska, Florida, Montana, New Hampshire, Nevada, Utah, Indiana and North Carolina.

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