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Missouri Income Tax Law in Full

by Kelly B.

Missouri Income Tax Law, Missouri Income Tax Laws

What are Law Income Requirements in the State of Missouri?

Missouri is a state in the US with over six million residents. It stands 21st in the most extensive state in the area. Like any state, Missouri has its tax laws. The Internal Revenue Service (IRS) handles the federal taxation, and the Missouri Department of Revenue handles the state tax.

Federal tax vs. State tax
The federal and state taxes differ based on the tax rates applied, taxable income, deductions and tax credit allowed. Both are determined by applying tax rates to taxable income. Federal tax is collected by the US government, and state tax is collected by the particular state. Every state has federal tax, but may or may not have state tax.

Missouri tax laws

The Department of Revenue Missouri has divided taxing into income tax, sales tax, and property tax. While the income and sales tax is collected and administered by the Missouri Department of revenue, the property tax is administered by the local jurisdiction.

Income tax: Income tax in Missouri takes the form of individual, corporate, financial institutions, earnings, and taxation of pass-through entities.

Individual income tax: Every resident and non-resident or Missouri who earn at least $600 income from Missouri have to file for individual income tax returns. Residents who have filed for federal returns too have to file for individual income tax returns in Missouri.

Missouri Income Tax Law

Corporate income tax: Any corporation doing business in Missouri have to pay an income tax of 6.25%.

Financial institution tax: The tax rate for operating financial institutions such as credit union, bank, consumer credit or loan business is 7% of net income.

Earnings: Apart from St. Louis and Kansas, all other municipalities are prohibited from imposing the tax on income. St. Louis and Kansas impose an earnings tax on businesses and individuals doing business within the city limits. The residents pay 1% of the income and non-residents doing business within the city limits too, pay 1% of the income.

Taxation of pass-through entities: Sole proprietorship, partnerships, small corporations are considered pass-through entities. These entities are not subject to income tax. Instead, the owners are taxed individually on the income, accounting their share in profit and loss.

 

Sales tax: Missouri imposes a retail state tax of 4%, 1% food tax and another 0.125% is dedicated to the department of conservation, and 0.1% to the department of natural resources. A state use tax on stored, used or consumed tangible personal property is imposed. Tobacco tax imposed in the state of Missouri is 10% of the manufacturer's invoice price.

Property tax: Except for motorized vehicles, most personal property is exempt from tax. Government property, property used as non-profit cemeteries, property used for schools, colleges, religious and charitable purposes are exempt from tax. Federal estate tax law does not levy an inheritance tax and estate tax in Missouri. But the fiduciary tax is charged on income earned by an estate or trust.

Missouri Income Tax Laws

Missouri tax fraud and tax evasion laws

Tax fraud or tax evasion refers to someone underpaying or failing to pay the tax. It is not considered an innocent mistake if someone intentionally fails to fill the form accurately. Tax fraud and tax evasion is a punishable offense. The state of Missouri penalizes tax evaders and fraudsters. Both individuals and corporates who evade tax owe the unpaid tax to the state of Missouri. They are also obligated to pay the cost of prosecution. Missouri prohibits the following tax-related activities. The offenders are charged accordingly.

  • Failure to give tax list
  • Official misconduct by the tax collector
  • Assessors and tax collectors neglecting their duties
  • Double assessment of the fraudulent list to be charged with perjury
  • Sale and use tax violation
  • False tax returns
  • False certificates and statements filed
  • Filing false returns
  • Tax fraud and evasion of tax

Tax is inevitable in any state. Although no one enjoys paying tax, one must understand that it helps fund public services and entities that we depend on daily.


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