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Tax battle brewing at Kansas-Missouri border

July 24, 2007

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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TAX-SAVVY WAYS 
TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

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