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Types of Taxes in Missouri

Like most U.S. states, Missouri imposes several different taxes on its residents. The state's Department of Revenue manages tax policy, which includes taxes on income, consumption and other economic activities.

Sales Tax

Missouri has a state sales tax rate of 4.225 percent. However, the state also allows local governments, including cities, counties and fire districts, to add a sales and use tax to the state's base rate. In some places, sales tax rates are over 10 percent when these local sales taxes are added in.

Two major product categories are exempt from state sales tax. These include prescription drugs, which carry no tax, and grocery items, which are taxed at a lower rate of 1.225 percent.

Pigovian Tax

The state of Missouri also mandates several forms of Pigovian taxes, which it imposes on specific products to discourage their widespread use or to generate special revenue. Missouri imposes these taxes on gasoline, diesel fuel and cigarettes. Both gas and diesel fuel carry a tax of 17.3 cents per gallon. Cigarette buyers pay an additional 17 cents for each pack of 20 cigarettes they buy.

Property Tax

Missouri residents must also pay property taxes. These taxes are based on an assessment of residential and personal property. The state assesses residential property at 19 percent of its fair market value, while personal property may fall anywhere from to 5 to 33.3 percent of its value for assessment purposes.

Missouri also allows for property tax credits for some senior citizens and disabled individuals. Known as the Missouri Property Tax Credit Claim, this program gives renters access to a $750 credit, while homeowners may claim a $1,100 credit.

Income Tax

Missouri's income tax policy follows a series of 10 income brackets, ranging from $1,000 to $9,000. All state residents who earn more than $9,000 annually are in the highest income bracket and pay a 6 percent income tax rate. Special tax rates apply to retirement income and retired military pay, including veterans' disability benefits.

Other Taxes

Several other taxes apply only to certain individuals or transaction types in Missouri, These include a fiduciary tax on income earned by an estate or trust and a partnership tax for individuals who earn income out of state through a joint venture with a non-Missouri resident. As of 2005, Missouri has no estate tax.

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