Missouri Lawmaker Introduces Bill to Exempt Stimulus Checks From State Tax

A stimulus check issued by the IRS is seen in San Antonio, Texas, on April 23, 2020. Eric Gay/AP Photo File

A Republican lawmaker in Missouri has introduced state-level legislation to exempt federal stimulus checks—or economic impact payments—from state income tax.

Cody Smith, who chairs the Missouri House Budget Committee, sponsored the bill (pdf), which excludes economic impact payments from a Missouri taxpayer’s adjusted gross income, effectively exempting them from state taxes.

Smith’s bill is similar to legislation adopted in Missouri last year that waived state income taxes on federal stimulus checks that were distributed under the 2020 Coronavirus Aid, Relief, and Economic Security, or CARES, Act.

“This legislation would waive that personal income tax not only on the most recent round of stimulus related to COVID-19, but on anything going forward related to this pandemic specifically,” Smith told Missourinet in an interview published on Feb. 15.

The most recent batch of stimulus, worth $900 billion, was signed into law by President Donald Trump on Dec. 27. It provided a round of $600 economic stimulus checks.

“Missourians have already paid their share for these stimulus checks, and by fixing this into law, we can ensure individuals and families affected by the pandemic get the help they need with minimal state interference,” Smith told the St. Louis Post-Dispatch.

So far, the bill has gone through two readings in the House and been referred to the House Ways and Means Committee. A companion Senate bill has not yet been introduced.

Smith told Missourinet he’s “very optimistic” that his bill, or one similar, will eventually be passed.

President Joe Biden’s proposed $1.9 trillion relief package includes another round of economic impact payments, this time $1,400.

Biden faces resistance from Republicans over the high price tag of the stimulus bill. The president and his allies have argued that going “big” will help boost the economy and bring the pandemic under control.

The $1.9 trillion relief proposal would give nearly $3,600 in direct payments and other benefits to the poorest Americans, according to a new analysis.

Households making less than $21,300 would see an average boost of $3,590, the Institute of Taxation and Economic Policy (ITEP) said. This comes from a combination of the $1,400 stimulus check and the expansion of two tax credits, one for parents and another for those bringing in little income.

Biden is scheduled to travel to Wisconsin on Tuesday to pitch the relief bill to voters, with White House spokeswoman Jen Psaki saying last week Biden would do a CNN town hall while visiting the state.

The White House strategy to promote the package and other policy goals involves getting out to voters, with Biden stepping up his travel in coming days, including a trip to Michigan on Thursday.