Committee passes Senate substitute for SB 59 to expand tax deductions for veterans' survivors, first responders and educators

The Committee on Veterans and Armed Forces voted to pass the Senate substitute for Senate Bill 59 after a public hearing and executive session. Chair Griffith moved the committee to vote the substitute "do pass," and the motion carried by voice and roll call: 19 ayes, 1 no and 1 present.

Senator Jill Carter, who presented the substitute, described it as legislation to provide targeted tax relief for military families, first responders and educators. "This bill... extends that same benefit to their families, allowing them to deduct all survivor benefits received after a veteran's passing," she said when summarizing the veteran survivor-benefits provision. Carter also outlined additions made on the Senate floor that the substitute carries, including first-responder survivor deductions and educator-related tax deductions.

The substitute contains four principal changes as presented: it extends the existing tax exemption for military retirement benefits to surviving family members; it provides a similar survivor-benefits deduction for eligible first responders; it creates an educator expense deduction allowing qualifying school employees to deduct up to $500 of out-of-pocket classroom expenses (applicable to teachers, counselors, principals, aides and preschool educators who work at least 900 hours per school year); and it restores and extends the tax deduction for contributions to a "long-term dignity savings account" through Dec. 31, 2030, to help Missourians save for future long-term-care costs.

Committee members asked clarifying questions during the hearing. One committee member asked, "What's to guarantee they use that deduction for supplies? Do they have to keep receipts?" Senator Carter replied that the deduction is similar to other tax deductions and that taxpayers would retain receipts and document expenses for their accountant or tax preparer. On residency and eligibility, a committee member asked whether the survivor-benefits deduction would apply to retirees who moved to Missouri from another state; the committee was advised the interpretation is that the provisions apply to Missouri residents (as described in the bill's language) and to state and local personnel as defined there.

Representative Roberts said he liked the bill but had a possible conflict because the change could affect retirement income for people who moved to Missouri; he said, "Until we have an answer to that question... I'm gonna be voting present." The roll call recorded Roberts as voting "present." Wolfen cast the sole recorded "no" vote; 19 members voted "aye."

After the vote the committee chair announced there was no further business and adjourned. The full text of the Senate substitute for Senate Bill 59 and any fiscal or legal analyses were not included in the hearing record excerpted in the transcript.