JEFFERSON CITY — The most recent rounds of federal stimulus payments would once again be exempt from state taxation under a proposal granted initial approval in the Missouri House.
Rep. Cody Smith, R-Jasper, said the House exempted the first round of federal payments from Missouri taxes last year, but did not address future payments. Since then, the federal government has sent out two more payments.
“Those would be subject to state tax if we don’t change that in statute,” he said.
Smith’s proposal would stop the state from collecting income tax on both the past payments and any future COVID-related payments from the federal government.
Rep. Curtis Trent, R-Springfield, put forth an amendment to also remove state taxes for anyone younger than 26.
After facing bipartisan criticism related to the proposal’s potential fiscal impact and the fairness of targeting one age group, Trent withdrew the amendment.
Discussion on taxing the stimulus payments was brief, but Rep. Ashley Bland Manlove, D-Kansas City, registered her support of the legislation before it received first-round approval from the House.
The House still must vote on the proposal one more time before it heads to the Senate.
Smith’s proposal is House Bill 991.