The state senate is trying to curtail the latest Missouri-Kansas border war by correcting a tax law passed last year. The same measure is removing an opportunity for most of our other neighboring states to increase taxes on thousands of Missourians.
It’s kind of complicated to explain.
Until last year, Missourian and seven of the eight states that surround us allowed people from states working in the OTHER state to deduct their property taxes in calculating the income tax they paid the other states. In other words, Kansans working in Missouri could deduct their Kansas property taxes as they calculated their Missouri income tax. In return, Missourians working in the other states could deduct their Missouri property taxes when they calculated the income taxes due to those other states.
Except for Illinois. It does not recognize that reciprocal arrangement. Until last year, Illinois workers with jobs here could deduct their Illinois property taxes in paying Missouri income tax, but Illinois did not accord that courtesy to Missourians working there.
Last year’s law aimed at Illinois hit all of our eight neighbors.
Kansas immediately ran up the battle flag. The Kansas legislature is on the verge of passing a bill that takes away the Missourians’ property tax deductions when they calculate their Kansas income tax, a bill that Missouri lawmakers say amounts to the Kansas legislature increasing taxes on Missourians, which is the same argument that Kansas makes in attacking last year’s Missouri action.
The senate has advanced Senator Lu Ann Ridgeway’s bill putting things back the way they were, except for Illinois. Her bill says Missouri will recognize reciprocal arrangements with other states that allow Missourians to deduct their property taxes from the income taxes owed other states. But the bill says Missouri will treat Illinois the way Illinois treats Missouri: no property tax deductions allowed for residents of the other state by the–uh–other state, if you get what we mean.
The senate is expected to send its bill to the House. The House already has passed its version of the border war truce bill and it’s ready for Senate debate.
Missouri lawmakers are trying to get one bill or the other to the Governor soon. The Kansas legislature could act at the end of the month if Missouri’s legislature hasn’t passed its corrective legislation.