Ballot measure to eliminate income tax, add new sales taxes set for ballot
EDITOR'S NOTE: The date when the issue could appear on the ballot has been corrected.
JEFFERSON CITY, Mo. (KMIZ)
A resolution to put a measure to eliminate the income tax and allow new sales taxes will appear before voters in August or November.
The Missouri House on Tuesday approved the measure with a 95-59 vote. The Senate passed the measure last week, known as House Joint Resolutions 173 and 174.
Supporters say eliminating the income tax will put more money back in Missourians pockets so they can decide how they want to spend it. Critics, however, have said the change would shift more of the state's tax burden to poor and middle-class residents.
Rep. David Tyson Smith (D-Columbia) spoke against the bill during debate, relaying the story of his grandmother, who lives on a fixed income.
"She is on a fixed income, and she's not going to benefit from the elimination of sales tax," Tyson Smith said. "Her groceries are going to go up."
Some business groups also opposed the measure because it would add sales tax to services that aren't currently taxed, such as medical visits and real estate transactions.
The issue was a key priority for Gov. Mike Kehoe, helping drive lawmakers to push the measure across the finish line with three weeks still remaining in the legislative session.
“In a time where politicians make all kinds of promises and very rarely deliver, here we are debating something that our governor said he was going to do or at least attempt to do,” Rep. Brad Banderman(R-Franklin) said on the House floor Tuesday. “And here we are debating it. So I want to thank our governor for his work, his leadership in this.”
Kehoe celebrated the bill's passage in a social media post.
"HJR 173/174 has been truly agreed and finally passed, putting the choice to eliminate the state income tax where it belongs: in the hands of Missouri voters," the statement reads. "This is the first step in keeping our promise to make Missouri more competitive, attract jobs and investment, and let families keep more of what they earn from the start. We look forward to continuing this important conversation with Missourians in every corner of our state."
Supporters of phasing out the income tax say it would help Missouri grow and attract more businesses.
If approved by voters, Missouri would become the tenth state to eliminated their state income tax, which includes neighboring Tennessee, which repealed its state income tax in 2021.
“Do we want to continue to be in the middle of the pack, or do we want to lead? I look to our neighbor to the south,” Rep. George Hruza, R-St. Louis said.
Currently, income tax makes up about two-thirds of Missouri’s general revenue.
“There is no universe in which we eliminate the income tax without drastically increasing sales taxes on every single Missourian,” House Minority Leader Ashley Aune (D-Platte) said. “That means 80% of Missourians are going to end up paying more than they already do into the tax system here in Missouri.”
If ultimately approved by voters, it would mark the first major change to Missouri’s income tax since 2014, when the rate was lowered from 6% to 4.7%.
Gov. Kehoe has until May 22 to decide whether the measure will appear on the August primary ballot or the November general election.
