HB 2975

                                SECOND REGULAR SESSION
                   HOUSE BILL NO. 2975
                          103RD GENERAL ASSEMBLY
                          INTRODUCED BY REPRESENTATIVE BOYKO.
6241H.03I  JOSEPH ENGLER, Chief Clerk
                                           AN ACT
To repeal sections 143.011, 143.021, and 143.121, RSMo, and to enact in lieu thereof three
       new sections relating to income tax, with a referendum clause.
Be it enacted by the General Assembly of the state of Missouri, as follows:
        Section A. Sections 143.011, 143.021, and 143.121, RSMo, are repealed and three
2 new sections enacted in lieu thereof, to be known as sections 143.011, 143.021, and 143.121,
3 to read as follows:
        143.011. 1. For all tax years ending on or before December 31, 2026, a tax is
2 hereby imposed for every [taxable] tax year on the Missouri taxable income of every resident.
3 The tax shall be determined by applying the tax table or the rate provided in section 143.021,
4 which is based upon the following rates:
5If the Missouri taxable income  The tax is:
6is:
7Not over $1,000.00  1 1/2% of the Missouri taxable income
8Over $1,000 but not over       $15 plus 2% of excess over $1,000
9$2,000
10Over $2,000 but not over       $35 plus 2 1/2% of excess over $2,000
11$3,000
12Over $3,000 but not over       $60 plus 3% of excess over $3,000
13$4,000
14Over $4,000 but not over       $90 plus 3 1/2% of excess over $4,000
15$5,000
EXPLANATION — Matter enclosed in bold-faced brackets [thus] in the above bill is not enacted and is
intended to be omitted from the law. Matter in bold-face type in the above bill is proposed language.
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16Over $5,000 but not over  $125 plus 4% of excess over $5,000
17$6,000
18Over $6,000 but not over  $165 plus 4 1/2% of excess over $6,000
19$7,000
20Over $7,000 but not over  $210 plus 5% of excess over $7,000
21$8,000
22Over $8,000 but not over  $260 plus 5 1/2% of excess over $8,000
23$9,000
24Over $9,000  $315 plus 6% of excess over $9,000
252. (1) Notwithstanding the provisions of subsection 1 of this section to the contrary,
26 beginning with the 2023 calendar year, but ending on December 31, 2026, the top rate of tax
27 pursuant to subsection 1 of this section shall be four and ninety-five hundredths percent.
28(2) The modification of tax rates made pursuant to this subsection shall apply only to
29 tax years that begin on or after January 1, 2023.
30(3) The director of the department of revenue shall, by rule, adjust the tax table
31 provided in subsection 1 of this section to effectuate the provisions of this subsection. The
32 top remaining rate of tax shall apply to all income in excess of seven thousand dollars, as
33 adjusted pursuant to subsection 5 of this section.
343. (1) In addition to the rate reduction under subsection 2 of this section, beginning
35 with the 2024 calendar year, but ending on December 31, 2026, the top rate of tax under
36 subsection 1 of this section may be reduced by fifteen hundredths of a percent. A reduction in
37 the rate of tax shall take effect on January first of a calendar year and such reduced rates shall
38 continue in effect until the next reduction occurs.
39(2) A reduction in the rate of tax shall only occur if the amount of net general revenue
40 collected in the previous fiscal year exceeds the highest amount of net general revenue
41 collected in any of the three fiscal years prior to such fiscal year by at least one hundred
42 seventy-five million dollars.
43(3) Any modification of tax rates under this subsection shall only apply to tax years
44 that begin on or after a modification takes effect.
45(4) The director of the department of revenue shall, by rule, adjust the tax tables under
46 subsection 1 of this section to effectuate the provisions of this subsection.
474. [(1) In addition to the rate reductions under subsections 2 and 3 of this section,
48 beginning with the calendar year immediately following the calendar year in which a
49 reduction is made pursuant to subsection 3 of this section, the top rate of tax under subsection
50 1 of this section may be further reduced over a period of years. Each reduction in the top rate
51 of tax shall be by one-tenth of a percent and no more than one reduction shall occur in a
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52 calendar year. No more than three reductions shall be made under this subsection.
53 Reductions in the rate of tax shall take effect on January first of a calendar year and such
54 reduced rates shall continue in effect until the next reduction occurs.
55(2) (a) A reduction in the rate of tax shall only occur if:
56a. The amount of net general revenue collected in the previous fiscal year exceeds the
57 highest amount of net general revenue collected in any of the three fiscal years prior to such
58 fiscal year by at least two hundred million dollars; and
59b. The amount of net general revenue collected in the previous fiscal year exceeds the
60 amount of net general revenue collected in the fiscal year five years prior, adjusted annually
61 by the percentage increase in inflation over the preceding five fiscal years.
62(b) The amount of net general revenue collected required by subparagraph a. of
63 paragraph (a) of this subdivision in order to make a reduction pursuant to this subsection shall
64 be adjusted annually by the percent increase in inflation beginning with January 2, 2023.
65(3) Any modification of tax rates under this subsection shall only apply to tax years
66 that begin on or after a modification takes effect.
67(4) The director of the department of revenue shall, by rule, adjust the tax tables under
68 subsection 1 of this section to effectuate the provisions of this subsection. The bracket for
69 income subject to the top rate of tax shall be eliminated once the top rate of tax has been
70 reduced below the rate applicable to such bracket, and the top remaining rate of tax shall
71 apply to all income in excess of the income in the second highest remaining income bracket.]
72 Beginning January 1, 2027, a tax is hereby imposed for every tax year on the Missouri
73 taxable income of every resident. The tax shall be determined by applying the tax table
74 or the rate provided in section 143.021, which is based upon the following rates:
75If the Missouri taxable income is:        The tax is:
76Not over $2,000.00  $0
77Over $2,000 but not over $7,500  2.9% of excess over $2,000
78Over $7,500 but not over $30,000  $159 plus 4.55% of excess over
                                                 $7,500
79Over $30,000 but not over  $1,183.25 plus 4.7% of excess over
80$1,000,000  $30,000
81Over $1,000,000  $46,773 plus 5.9% of excess over
82$1,000,000
835. (1) Beginning with the 2017 calendar year, the brackets of Missouri taxable
84 income identified in subsection 1 of this section for all tax years beginning on or before
85 December 31, 2026, shall be adjusted annually by the percent increase in inflation. The
86 director shall publish such brackets annually beginning on or after October 1, 2016.
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87 Modifications to the brackets shall take effect on January first of each calendar year and shall
88 apply to tax years beginning on or after the effective date of the new brackets.
89(2) Beginning with the 2028 calendar year, the brackets of Missouri taxable
90 income identified in subsection 4 of this section shall be adjusted annually for inflation
91 using the same measurement and rate that the Social Security Administration uses to
92 calculate the percentage increase of the Social Security benefit cost-of-living adjustment
93 (COLA), as provided under the federal Social Security Act, 42 U.S.C. Section 301, et
94 seq., as amended. The director shall publish such brackets annually beginning on or
95 after October 1, 2027. Modifications to the brackets shall take effect on January first of
96 each calendar year and shall apply to tax years beginning on or after the effective date
97 of the new brackets.
986. As used in this section, for all tax years beginning on or before December 31,
99 2026, the following terms mean:
100(1) "CPI", the Consumer Price Index for All Urban Consumers for the United States
101 as reported by the Bureau of Labor Statistics, or its successor index;
102(2) "CPI for the preceding calendar year", the average of the CPI as of the close of the
103 twelve-month period ending on August thirty-first of such calendar year;
104(3) "Net general revenue collected", all revenue deposited into the general revenue
105 fund, less refunds and revenues originally deposited into the general revenue fund but
106 designated by law for a specific distribution or transfer to another state fund;
107(4) "Percent increase in inflation", the percentage, if any, by which the CPI for the
108 preceding calendar year exceeds the CPI for the year beginning September 1, 2014, and
109 ending August 31, 2015.
          143.021. 1. Every resident having a taxable income shall determine his or her tax
2 from the rates provided in section 143.011. For all tax years beginning on or before
3 December 31, 2022, there shall be no tax on a taxable income of less than one hundred
4 dollars.
52. (1) Notwithstanding the provisions of subsection 1 of section 143.011 to the
6 contrary, for all tax years beginning on or after January 1, 2023, but on or before December
7 31, 2026, there shall be no tax on taxable income of less than or equal to one thousand dollars,
8 as adjusted pursuant to subsection 5 of section 143.011.
9(2) The modifications made pursuant to this subsection shall only apply to tax years
10 that begin on or after January 1, 2023.
11(3) The director of the department of revenue shall, by rule, adjust the tax table
12 provided in subsection 1 of section 143.011 to effectuate the provisions of this subsection.
133. (1) Notwithstanding the provisions of section 143.011 to the contrary, for all
14 tax years beginning on or after January 1, 2027, there shall be no tax on a taxable
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15 income of less than or equal to two thousand dollars, as adjusted under subdivision (2)
16 of subsection 5 of section 143.011.
17(2) The modifications made under this subsection shall apply only to tax years
18 that begin on or after January 1, 2027.
19(3) The director of the department of revenue shall, by rule, adjust the tax table
20 provided under subsection 4 of section 143.011 to effectuate the provisions of this
21 subsection.
        143.121. 1. The Missouri adjusted gross income of a resident individual shall be the
2 taxpayer's federal adjusted gross income subject to the modifications in this section.
32. There shall be added to the taxpayer's federal adjusted gross income:
4(1) The amount of any federal income tax refund received for a prior year which
5 resulted in a Missouri income tax benefit. The amount added pursuant to this subdivision
6 shall not include any amount of a federal income tax refund attributable to a tax credit
7 reducing a taxpayer's federal tax liability pursuant to Public Law 116-136 or 116-260, enacted
8 by the 116th United States Congress, for the tax year beginning on or after January 1, 2020,
9 and ending on or before December 31, 2020, and deducted from Missouri adjusted gross
10 income pursuant to section 143.171. The amount added under this subdivision shall also not
11 include any amount of a federal income tax refund attributable to a tax credit reducing a
12 taxpayer's federal tax liability under any other federal law that provides direct economic
13 impact payments to taxpayers to mitigate financial challenges related to the COVID-19
14 pandemic, and deducted from Missouri adjusted gross income under section 143.171;
15(2) Interest on certain governmental obligations excluded from federal gross income
16 by 26 U.S.C. Section 103 of the Internal Revenue Code, as amended. The previous sentence
17 shall not apply to interest on obligations of the state of Missouri or any of its political
18 subdivisions or authorities and shall not apply to the interest described in subdivision (1) of
19 subsection 3 of this section. The amount added pursuant to this subdivision shall be reduced
20 by the amounts applicable to such interest that would have been deductible in computing the
21 taxable income of the taxpayer except only for the application of 26 U.S.C. Section 265 of the
22 Internal Revenue Code, as amended. The reduction shall only be made if it is at least five
23 hundred dollars;
24(3) The amount of any deduction that is included in the computation of federal
25 taxable income pursuant to 26 U.S.C. Section 168 of the Internal Revenue Code as amended
26 by the Job Creation and Worker Assistance Act of 2002 to the extent the amount deducted
27 relates to property purchased on or after July 1, 2002, but before July 1, 2003, and to the
28 extent the amount deducted exceeds the amount that would have been deductible pursuant to
29 26 U.S.C. Section 168 of the Internal Revenue Code of 1986 as in effect on January 1, 2002;
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30(4) The amount of any deduction that is included in the computation of federal
31 taxable income for net operating loss allowed by 26 U.S.C. Section 172 of the Internal
32 Revenue Code of 1986, as amended, [other than the deduction allowed by 26 U.S.C. Section
33 172(b)(1)(G) and 26 U.S.C. Section 172(i) of the Internal Revenue Code of 1986, as
34 amended,] for a net operating loss the taxpayer claims in the tax year in which the net
35 operating loss occurred or carries forward for a period of more than twenty years and carries
36 backward for more than two years. Any amount of net operating loss taken against federal
37 taxable income but disallowed for Missouri income tax purposes pursuant to this subdivision
38 after June 18, 2002, may be carried forward and taken against any income on the Missouri
39 income tax return for a period of not more than twenty years from the year of the initial loss;
40 and
41(5) For nonresident individuals in all [taxable] tax years ending on or after December
42 31, 2006, the amount of any property taxes paid to another state or a political subdivision of
43 another state for which a deduction was allowed on such nonresident's federal return in the
44 [taxable] tax year unless such state, political subdivision of a state, or the District of
45 Columbia allows a subtraction from income for property taxes paid to this state for purposes
46 of calculating income for the income tax for such state, political subdivision of a state, or the
47 District of Columbia;
48(6) For all tax years beginning on or after January 1, 2018, any interest expense paid
49 or accrued in a previous [taxable] tax year, but allowed as a deduction under 26 U.S.C.
50 Section 163, as amended, in the current [taxable] tax year by reason of the carryforward of
51 disallowed business interest provisions of 26 U.S.C. Section 163(j), as amended. For the
52 purposes of this subdivision, an interest expense is considered paid or accrued only in the first
53 [taxable] tax year the deduction would have been allowable under 26 U.S.C. Section 163, as
54 amended, if the limitation under 26 U.S.C. Section 163(j), as amended, did not exist.
553. There shall be subtracted from the taxpayer's federal adjusted gross income the
56 following amounts to the extent included in federal adjusted gross income:
57(1) Interest received on deposits held at a federal reserve bank or interest or dividends
58 on obligations of the United States and its territories and possessions or of any authority,
59 commission or instrumentality of the United States to the extent exempt from Missouri
60 income taxes pursuant to the laws of the United States. The amount subtracted pursuant to
61 this subdivision shall be reduced by any interest on indebtedness incurred to carry the
62 described obligations or securities and by any expenses incurred in the production of interest
63 or dividend income described in this subdivision. The reduction in the previous sentence
64 shall only apply to the extent that such expenses including amortizable bond premiums are
65 deducted in determining the taxpayer's federal adjusted gross income or included in the
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66 taxpayer's Missouri itemized deduction. The reduction shall only be made if the expenses
67 total at least five hundred dollars;
68(2) The portion of any gain, from the sale or other disposition of property having a
69 higher adjusted basis to the taxpayer for Missouri income tax purposes than for federal
70 income tax purposes on December 31, 1972, that does not exceed such difference in basis. If
71 a gain is considered a long-term capital gain for federal income tax purposes, the modification
72 shall be limited to one-half of such portion of the gain;
73(3) The amount necessary to prevent the taxation pursuant to this chapter of any
74 annuity or other amount of income or gain which was properly included in income or gain and
75 was taxed pursuant to the laws of Missouri for a [taxable] tax year prior to January 1, 1973, to
76 the taxpayer, or to a decedent by reason of whose death the taxpayer acquired the right to
77 receive the income or gain, or to a trust or estate from which the taxpayer received the income
78 or gain;
79(4) Accumulation distributions received by a taxpayer as a beneficiary of a trust to the
80 extent that the same are included in federal adjusted gross income;
81(5) The amount of any state income tax refund for a prior year which was included in
82 the federal adjusted gross income;
83(6) The portion of capital gain specified in section 135.357 that would otherwise be
84 included in federal adjusted gross income;
85(7) The amount that would have been deducted in the computation of federal taxable
86 income pursuant to 26 U.S.C. Section 168 of the Internal Revenue Code as in effect on
87 January 1, 2002, to the extent that amount relates to property purchased on or after July 1,
88 2002, but before July 1, 2003, and to the extent that amount exceeds the amount actually
89 deducted pursuant to 26 U.S.C. Section 168 of the Internal Revenue Code as amended by the
90 Job Creation and Worker Assistance Act of 2002;
91(8) For all tax years beginning on or after January 1, 2005, the amount of any income
92 received for military service while the taxpayer serves in a combat zone which is included in
93 federal adjusted gross income and not otherwise excluded therefrom. As used in this section,
94 "combat zone" means any area which the President of the United States by Executive Order
95 designates as an area in which Armed Forces of the United States are or have engaged in
96 combat. Service is performed in a combat zone only if performed on or after the date
97 designated by the President by Executive Order as the date of the commencing of combat
98 activities in such zone, and on or before the date designated by the President by Executive
99 Order as the date of the termination of combatant activities in such zone;
100(9) For all tax years ending on or after July 1, 2002, with respect to qualified property
101 that is sold or otherwise disposed of during a [taxable] tax year by a taxpayer and for which
102 an additional modification was made under subdivision (3) of subsection 2 of this section, the
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103 amount by which additional modification made under subdivision (3) of subsection 2 of this
104 section on qualified property has not been recovered through the additional subtractions
105 provided in subdivision (7) of this subsection;
106(10) For all tax years beginning on or after January 1, 2014, the amount of any
107 income received as payment from any program which provides compensation to agricultural
108 producers who have suffered a loss as the result of a disaster or emergency, including the:
109(a) Livestock Forage Disaster Program;
110(b) Livestock Indemnity Program;
111(c) Emergency Assistance for Livestock, Honeybees, and Farm-Raised Fish;
112(d) Emergency Conservation Program;
113(e) Noninsured Crop Disaster Assistance Program;
114(f) Pasture, Rangeland, Forage Pilot Insurance Program;
115(g) Annual Forage Pilot Program;
116(h) Livestock Risk Protection Insurance Plan;
117(i) Livestock Gross Margin Insurance Plan;
118(11) For all tax years beginning on or after January 1, 2018, any interest expense paid
119 or accrued in the current [taxable] tax year, but not deducted as a result of the limitation
120 imposed under 26 U.S.C. Section 163(j), as amended. For the purposes of this subdivision, an
121 interest expense is considered paid or accrued only in the first [taxable] tax year the deduction
122 would have been allowable under 26 U.S.C. Section 163, as amended, if the limitation under
123 26 U.S.C. Section 163(j), as amended, did not exist;
124(12) One hundred percent of any retirement benefits received by any taxpayer as a
125 result of the taxpayer's service in the Armed Forces of the United States, including reserve
126 components and the National Guard of this state, as defined in 32 U.S.C. Sections 101(3) and
127 109, and any other military force organized under the laws of this state;
128(13) For all tax years beginning on or after January 1, 2022, one hundred percent of
129 any federal, state, or local grant moneys received by the taxpayer if the grant money was
130 disbursed for the express purpose of providing or expanding access to broadband internet to
131 areas of the state deemed to be lacking such access;
132(14) (a) For all tax years beginning on or after January 1, 2025, but on or before
133 December 31, 2026, one hundred percent of all income reported as a capital gain for federal
134 income tax purposes by an individual subject to tax pursuant to section 143.011; and
135(b) For all tax years beginning on or after January first of the tax year following the
136 tax year in which the top rate of tax imposed pursuant to section 143.011 is equal to or less
137 than four and one-half percent, but on or before December 31, 2026, one hundred percent of
138 all income reported as a capital gain for federal income tax purposes by an entity subject to
139 tax pursuant to section 143.071; and
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140(15) For all tax years beginning on or after January 1, 2026, but on or before
141 December 31, 2026, the portion of capital gain on the sale or exchange of specie, as that term
142 is defined in section 408.010, that are otherwise included in the taxpayer's federal adjusted
143 gross income.
1444. There shall be added to or subtracted from the taxpayer's federal adjusted gross
145 income the taxpayer's share of the Missouri fiduciary adjustment provided in section 143.351.
1465. There shall be added to or subtracted from the taxpayer's federal adjusted gross
147 income the modifications provided in section 143.411.
1486. In addition to the modifications to a taxpayer's federal adjusted gross income in this
149 section, to calculate Missouri adjusted gross income there shall be subtracted from the
150 taxpayer's federal adjusted gross income any gain recognized pursuant to 26 U.S.C. Section
151 1033 of the Internal Revenue Code of 1986, as amended, arising from compulsory or
152 involuntary conversion of property as a result of condemnation or the imminence thereof.
1537. (1) As used in this subsection, "qualified health insurance premium" means the
154 amount paid during the tax year by such taxpayer for any insurance policy primarily
155 providing health care coverage for the taxpayer, the taxpayer's spouse, or the taxpayer's
156 dependents.
157(2) In addition to the subtractions in subsection 3 of this section, one hundred percent
158 of the amount of qualified health insurance premiums shall be subtracted from the taxpayer's
159 federal adjusted gross income to the extent the amount paid for such premiums is included in
160 federal taxable income. The taxpayer shall provide the department of revenue with proof of
161 the amount of qualified health insurance premiums paid.
1628. (1) Beginning January 1, 2014, in addition to the subtractions provided in this
163 section, one hundred percent of the cost incurred by a taxpayer for a home energy audit
164 conducted by an entity certified by the department of natural resources under section 640.153
165 or the implementation of any energy efficiency recommendations made in such an audit shall
166 be subtracted from the taxpayer's federal adjusted gross income to the extent the amount paid
167 for any such activity is included in federal taxable income. The taxpayer shall provide the
168 department of revenue with a summary of any recommendations made in a qualified home
169 energy audit, the name and certification number of the qualified home energy auditor who
170 conducted the audit, and proof of the amount paid for any activities under this subsection for
171 which a deduction is claimed. The taxpayer shall also provide a copy of the summary of any
172 recommendations made in a qualified home energy audit to the department of natural
173 resources.
174(2) At no time shall a deduction claimed under this subsection by an individual
175 taxpayer or taxpayers filing combined returns exceed one thousand dollars per year for
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176 individual taxpayers or cumulatively exceed two thousand dollars per year for taxpayers
177 filing combined returns.
178(3) Any deduction claimed under this subsection shall be claimed for the tax year in
179 which the qualified home energy audit was conducted or in which the implementation of the
180 energy efficiency recommendations occurred. If implementation of the energy efficiency
181 recommendations occurred during more than one year, the deduction may be claimed in more
182 than one year, subject to the limitations provided under subdivision (2) of this subsection.
183(4) A deduction shall not be claimed for any otherwise eligible activity under this
184 subsection if such activity qualified for and received any rebate or other incentive through a
185 state-sponsored energy program or through an electric corporation, gas corporation, electric
186 cooperative, or municipally owned utility.
1879. The provisions of subsection 8 of this section shall expire on December 31, 2020.
18810. (1) As used in this subsection, the following terms mean:
189(a) "Beginning farmer", a taxpayer who:
190a. Has filed at least one but not more than ten Internal Revenue Service Schedule F
191 (Form 1040) Profit or Loss From Farming forms since turning eighteen years of age;
192b. Is approved for a beginning farmer loan through the USDA Farm Service Agency
193 Beginning Farmer direct or guaranteed loan program;
194c. Has a farming operation that is determined by the department of agriculture to be
195 new production agriculture but is the principal operator of a farm and has substantial farming
196 knowledge; or
197d. Has been determined by the department of agriculture to be a qualified family
198 member;
199(b) "Farm owner", an individual who owns farmland and disposes of or relinquishes
200 use of all or some portion of such farmland as follows:
201a. A sale to a beginning farmer;
202b. A lease or rental agreement not exceeding ten years with a beginning farmer; or
203c. A crop-share arrangement not exceeding ten years with a beginning farmer;
204(c) "Qualified family member", an individual who is related to a farm owner within
205 the fourth degree by blood, marriage, or adoption and who is purchasing or leasing or is in a
206 crop-share arrangement for land from all or a portion of such farm owner's farming operation.
207(2) (a) In addition to all other subtractions authorized in this section, a taxpayer who
208 is a farm owner who sells all or a portion of such farmland to a beginning farmer may subtract
209 from such taxpayer's Missouri adjusted gross income an amount to the extent included in
210 federal adjusted gross income as provided in this subdivision.
211(b) Subject to the limitations in paragraph (c) of this subdivision, the amount that may
212 be subtracted shall be equal to the portion of capital gains received from the sale of such
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213 farmland that such taxpayer receives in the tax year for which such taxpayer subtracts such
214 capital gain.
215(c) A taxpayer may subtract the following amounts and percentages per tax year in
216 total capital gains received from the sale of such farmland under this subdivision:
217a. For the first two million dollars received, one hundred percent;
218b. For the next one million dollars received, eighty percent;
219c. For the next one million dollars received, sixty percent;
220d. For the next one million dollars received, forty percent; and
221e. For the next one million dollars received, twenty percent.
222(d) The department of revenue shall prepare an annual report reviewing the costs and
223 benefits and containing statistical information regarding the subtraction of capital gains
224 authorized under this subdivision for the previous tax year including, but not limited to, the
225 total amount of all capital gains subtracted and the number of taxpayers subtracting such
226 capital gains. Such report shall be submitted before February first of each year to the
227 committee on agriculture policy of the Missouri house of representatives and the committee
228 on agriculture, food production and outdoor resources of the Missouri senate, or the successor
229 committees.
230(3) (a) In addition to all other subtractions authorized in this section, a taxpayer who
231 is a farm owner who enters a lease or rental agreement for all or a portion of such farmland
232 with a beginning farmer may subtract from such taxpayer's Missouri adjusted gross income an
233 amount to the extent included in federal adjusted gross income as provided in this
234 subdivision.
235(b) Subject to the limitation in paragraph (c) of this subdivision, the amount that may
236 be subtracted shall be equal to the portion of cash rent income received from the lease or
237 rental of such farmland that such taxpayer receives in the tax year for which such taxpayer
238 subtracts such income.
239(c) No taxpayer shall subtract more than twenty-five thousand dollars per tax year in
240 total cash rent income received from the lease or rental of such farmland under this
241 subdivision.
242(4) (a) In addition to all other subtractions authorized in this section, a taxpayer who
243 is a farm owner who enters a crop-share arrangement on all or a portion of such farmland with
244 a beginning farmer may subtract from such taxpayer's Missouri adjusted gross income an
245 amount to the extent included in federal adjusted gross income as provided in this
246 subdivision.
247(b) Subject to the limitation in paragraph (c) of this subdivision, the amount that may
248 be subtracted shall be equal to the portion of income received from the crop-share
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249 arrangement on such farmland that such taxpayer receives in the tax year for which such
250 taxpayer subtracts such income.
251(c) No taxpayer shall subtract more than twenty-five thousand dollars per tax year in
252 total income received from the lease or rental of such farmland under this subdivision.
253(5) The department of agriculture shall, by rule, establish a process to verify that a
254 taxpayer is a beginning farmer for purposes of this section and shall provide verification to
255 the beginning farmer and farm seller of such farmer's and seller's certification and
256 qualification for the exemption provided in this subsection.
         Section B. This act is hereby submitted to the qualified voters of this state for the
2 approval or rejection at an election which is hereby ordered and which shall be held and
3 conducted on Tuesday next following the first Monday in November, 2026, under the
4 applicable laws and constitutional provisions of this state for the submission of referendum
5 measures by the general assembly, and this act shall become effective when approved by a
6 majority of the votes cast thereon at such election and not otherwise.
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