INCOME TAXES

The following table presents a reconciliation of the federal statutory corporate income tax rate to the effective income tax rate for the three and nine months ended September 30, 2018 and 2017:



	Ameren			Ameren Missouri			Ameren Illinois
Three Months	2018		2017	2018		2017	2018		2017
Federal statutory corporate income tax rate:	21%		35%	21%		35%	21%		35%
Increases (decreases) from:
Amortization of excess deferred taxes	(6)		—	(7)	^(a)	—	(3)		—
Other depreciation differences	—		1	—		1	(1)		(2)
Amortization of deferred investment tax credit	(1)		(1)	—		(1)	—		—
State tax	6		7	4		3	5		7
TCJA	3	^(b)	—	—		—	4	^(b)	—
Other permanent items	—		(1)	—		—	—		—
Effective income tax rate	23%		41%	18%		38%	26%		40%



Nine Months
Federal statutory corporate income tax rate:	21%		35%	21%		35%	21%		35%
Increases (decreases) from:
Amortization of excess deferred taxes	(3)		—	(4)	^(a)	—	(4)		—
Other depreciation differences	—		—	—		1	—		—
Amortization of deferred investment tax credit	(1)		(1)	—		(1)	—		—
State tax	6		6	4		3	7		5
TCJA	1	^(b)	—	—		—	1	^(b)	—
Other permanent items	(1)		(1)	—		—	—		—
Effective income tax rate	23%		39%	21%		38%	25%		40%


(a)	Based on an order issued by the MoPSC in July 2018, Ameren Missouri began amortizing excess deferred taxes in August 2018. See Note 2 – Rate and Regulatory Matters for additional information.


(b)	The Ameren Companies updated their respective provisional estimates recorded related to TCJA, as discussed below.

Federal Tax Reform

As of December 31, 2017, the Ameren Companies made provisional estimates for the measurement and accounting of certain effects of the TCJA in accordance with SEC guidance, which provides for a one-year period in which to complete the required analysis and update provisional estimates. During the three and nine months ended September 30, 2018, Ameren, Ameren Missouri, and Ameren Illinois updated their respective provisional estimates and recorded $13 million, $4 million, and $4 million, respectively, of income tax expense, primarily due to the application of proposed IRS regulations on depreciation transition rules. As of September 30, 2018, our provisional estimates also include amounts related to compensation-related deductions, which remain subject to adjustment based on any additional guidance that may be issued.

Missouri Income Tax Rate

In June 2018, legislation modifying Missouri tax law was enacted to decrease the state's corporate income tax rate from 6.25% to 4%, effective January 1, 2020. As a result, in the second quarter of 2018, Ameren’s and Ameren Missouri’s accumulated deferred tax balances were revalued, resulting in a net decrease of $33 million to their accumulated deferred tax liability, which was offset by a regulatory liability. Additionally, Ameren recorded an immaterial amount to income tax expense. As a result of its PISA election under Missouri Senate Bill 564, which prohibits a change in electric base rates prior to April 2020, Ameren Missouri anticipates that the effect of this tax decrease will be reflected in customer rates upon completion of its next regulatory rate review. Ameren (parent) and nonregistrant subsidiaries do not expect this income tax decrease to have a material impact on net income.