States tapping historic surpluses for tax cuts and rebates

DAVID A. LIEB Associated Press

JEFFERSON CITY, Mo. — Stoked by the largest surplus in state history, Missouri’s Republican-led Legislature devised a $500 million plan to send one-time tax refunds to millions of households. In a shock to some, GOP Gov. Mike Parson vetoed it.

Parson’s objection: He wanted a bigger, longer-lasting tax cut.

“Now is the time for the largest income tax cut in our state’s history,” Parson declared as he called lawmakers back for a September special session to consider a $700 million permanent tax reduction.

Upon its likely approval, Missouri will join at least 32 states that already have enacted some type of tax cut or rebate this year — an astounding outpouring of billions of tax dollars back to the people. Idaho lawmakers are convening Thursday to consider more tax breaks, and Montana lawmakers also are weighing a special session for tax relief.

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Flush with federal pandemic aid and their own surging tax revenue, states have cut income tax rates for individuals and businesses, expanded tax deductions for families and retirees, pared back property taxes, waived sales taxes on groceries and suspended motor fuel taxes

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