$1.63 tax bill horror story
10 sort of hidden taxes

Tax battle brewing at Kansas-Missouri border

When Missouri when Gov. Matt Blunt signed a bill earlier this month that included an income tax break for Missourians who receive Social Security, many Show-Me State residents were showing big smiles in support of the law.

But it's definitely a different facial expression across the river in Kansas.

Folks in the Sunflower State have discovered that their neighbor's new law contains a provision that increases the tax bills of Kansans who work in Missouri by eliminating a deduction for real estate taxes paid outside the state.

Kansas_city_map_2_2 According to an article in the Kansas City Star on the interstate tax brouhaha, that means someone who lives in Kansas but works across the border, not an unusual occurrence in the greater KC area, is going to face a tax increase of around $200.

The paper points to Johnson County’s Economic Research Institute estimates that indicate more than 71,000 residents from eight nearby Missouri counties work in Johnson County, Kan., which is home to Overland Park, Olathe and several other bustling suburban communities. At least 53,000 Johnson County residents work in those neighboring Missouri counties.

I'm not sure how real estate taxes connect to higher taxes for workers who commute from one state to another, so it's a good thing I don't live in either state! But the Missouri measure has certainly lit a fire under some Kansans.

Responding to angry constituents, some Kansas state lawmakers say they're considering a retaliatory tax on their neighbors.

Others say Missouri's new law also could strengthen the hand of lawmakers in Topeka who want to repeal the KC metro area's bistate tax compact that finances improvements at Union Station and possibly other regional amenities.

If this battle heats up more, how long before we start hearing talk of a fence between the two states?

Another view of the tax cut: While Kansans definitely don't like the new law, some Missourians also are unhappy with its enactment. Blogger Missouri Political News details some of the objections to the measure.

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