Nixon opposes changes to senior tax break
Friday, December 10, 2010
Gov. Jay Nixon expressed opposition Thursday to the potential elimination of tax breaks for low-income seniors and disabled residents living in rented homes, essentially rejecting one of the money-saving recommendations of a commission he created.
Since 1973, Missouri has offered a state income tax break intended to offset the property taxes or rent payments of low-income seniors. That tax break has been expanded over the years to cover the disabled and the surviving spouses of deceased seniors.
The Missouri Tax Credit Review Commission recently recommended that the tax break be ended for renters but continued for homeowners. The commission estimated that the change, which would require legislative approval, could save the state $57 million annually.
Nixon created the panel to find ways to reduce Missouri’s array of income tax credits, and he praised the commission Thursday for producing “a thoughtful, deep report with solid information in it.” But he dismissed the potential of eliminating the rental tax credit, which is sometimes referred to as a “circuit breaker.”
“Maintaining the ability of seniors to get those income-eligible circuit breakers — whether they rent or whether they own — is an important consumer protection,” Nixon said. He later added: “I don’t think that with the challenges this economy faces that we should limit the circuit breakers for seniors.”
So far in 2010, the state has issued $116.4 million of tax credits to offset the property tax or rental payments of 217,615 seniors and disabled residents, according to figures provided by the Department of Revenue. The agency did not immediately have a breakdown of how many of those were renters. Figures from past years indicate that about half, or a little more, of the recipients lived in rental housing.
The commission said it made little sense to include renters in the program because its main purpose is to help offset property taxes, which renters do not directly pay.
The commission’s report said it “does not believe that property taxes have any significant effect on rents; rather landlords tend to charge as much as the market will allow them to charge and still maintain relatively full occupancy.”
Under the program, people can receive tax credits of up to $1,100 if they live in a home that they own and up to $750 if they live in a rented home. The amount of the tax credit gradually decreases as incomes rise.
The maximum income eligibility for individuals is $27,500 for renters and $30,000 for homeowners. The maximum eligibility for married couples is $29,500 for renters and $34,000 for homeowners.
More like this story
Use the comment form below to begin a discussion about this content.
Please review our Policies and Procedures before registering or commenting