JEFFERSON CITY – The Missouri House of Representatives on Thursday passed a resolution that would pave the way for a statewide vote on eliminating the state income tax. The proposal, a key priority for Governor Mike Kehoe, would amend the state constitution to allow lawmakers to expand sales taxes to offset the loss of revenue. The move represents a significant shift in Missouri’s tax structure and has sparked debate over its potential impact on residents and the state budget.
The resolution passed by a vote of 98-54, sending it to the Senate for consideration. If approved by voters in November, the measure would grant state lawmakers the authority to broaden the base of sales and use taxes, effectively phasing out the state income tax over time. Governor Kehoe has publicly stated his desire to eliminate the income tax within the next five years, though the resolution itself does not set a specific timeline for complete elimination. This potential overhaul of Missouri’s tax system is a major development for residents and businesses alike.
How Would the Tax Shift Work?
Currently, Missouri operates under a progressive income tax system, meaning tax rates increase with earnings. According to the Missouri Department of Revenue, individuals earning less than $1,313 annually are exempt from state income tax, while the highest rate of 4.7% applies to income exceeding $9,191. Under the proposed plan, state and local lawmakers would gain the ability to raise sales taxes, with the resulting revenue dedicated to gradually reducing and eventually eliminating the income tax. Representative John Martin, R-Columbia, championed the measure, arguing it would put more money directly into the hands of Missourians. “We have a historic opportunity to help Missourians have more grab-home pay, and they can choose to spend that,” Martin said during floor debate, as reported by the Missouri Independent.
House Speaker Jon Patterson, R-Lee’s Summit, described the proposal as a “modernization of the sales tax,” suggesting it could include taxing digital products. He emphasized that the goal isn’t simply to increase taxes, but to restructure the system. “Some of the sales taxes may go down. That’s an option,” Patterson stated in a news conference, according to KCUR.
Concerns Raised Over Potential Impact
While proponents argue the plan will stimulate the economy and benefit taxpayers, Democrats have voiced concerns that it will disproportionately burden low-income Missourians. Representative Yolanda Young, D-Kansas City, argued the proposal merely shifts the tax burden. “This proposal does not eliminate taxes; it simply shifts them, and it shifts them onto the backs of the very people who are already struggling the most,” Young said. She highlighted that increased sales taxes would impact essential purchases, such as car repairs, haircuts, and plumbing services.
House Minority Leader Ashley Aune, D-Kansas City, drew parallels to tax cuts implemented in Kansas during the administration of former Governor Sam Brownback. She warned that those cuts led to significant budget problems and ultimately resulted in the election of a Democratic governor. Aune pointed out that state income taxes currently account for approximately two-thirds of general revenue funds, and eliminating them without a viable replacement could create a $9 billion budget shortfall.
Representative Rudy Veit, D-Ballwin, voted against the measure, citing concerns about the potential impact on state funding for essential services, as noted in a press release from the Missouri House.
What’s Next?
The resolution now heads to the Missouri Senate, where leadership has indicated support for lowering the state income tax. If the Senate approves the measure, it will be placed on the ballot for voters to decide in November. State lawmakers are currently on spring break and will reconvene on Monday, March 23, leaving them less than two months to pass legislation this session. The debate over the future of Missouri’s tax system is far from over, and the coming months will be crucial in determining whether voters will have the opportunity to reshape the state’s financial landscape.
This is a developing story. Check back for updates as the resolution moves through the Senate.
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