New Missouri law lowers taxes for nonresidents

JEFFERSON CITY, Mo. (AP) -- Lt. Gov. Peter Kinder signs legislation designed to end a tax battle between Missouri and Kansas.

Missouri in 2007 passed a law barring those working in Missouri but living elsewhere from taking a property tax deduction off their Missouri income taxes. That prompted Kansas lawmakers to threaten higher taxes for Missourians who work across the border.

The bill signed by Kinder reinstates the property tax deduction -- but only for states allowing a similar tax break for Missourians. That's because the 2007 was aimed at Illinois, which does not allow a deduction for Missourians who work there.

The tax tiff affects state revenues more than taxpayers. That's because nonresidents paying more to Missouri get a reduction in their home-state taxes.