Senate endorses elimination of tax credit for renters

Posted April 4, 2013 at 1:09 pm

by Nick Thompson

The Missouri Senate has endorsed a plan to roll back a tax credit provided to low-income elderly and disabled renters.

The Senate bill, which is sponsored by Senate President Pro Tem Tom Dempsey, R-St.Charles, would restrict a tax break known as the “Circuit Breaker” tax credit solely to home owners. Under current law, the tax credit is provided to both home owners and renters who have lower incomes and are either elderly or disabled.

Critics charged it was unfair to deny to renters a tax break provided to low-income home owners.

“Don’t you think the cost of the property tax is buried in the rent?” asked Sen. Rob Schaaf, St. Joseph.

Dempsey responded that the property tax is part of the landlord’s cost of doing business. He described the bill as part of a broader plan designed to reduce tax credits provided to various categories of persons, activities and developers.

Sen. Kiki Curls, D-Kansas City, said many low-income seniors depend on the rebate to pay for necessities each year. However, Dempsey said the state can make a more efficient use of the funds to help seniors.

Democratic Gov. Jay Nixon included elimination of the program in his 2013 State of the State address. The governor-appointed Tax Credit Review Commission recommended that the program be eliminated in its 2010 and 2012 reports.

Legislative staff estimate elimination of the tax credit for lower income renters would free $57 million per year. Under the bill, that money would be transferred to programs for the elderly.