Missouri House Approves Plan to Overhaul Tax System, Measure Could Go to Voters

Jefferson City, Mo. (KFMO) - The Missouri House of Representatives has approved a sweeping proposal to restructure the state’s tax system, advancing a plan that could eventually eliminate Missouri’s income tax.

The measure passed by a 98-54 vote and now heads to the Missouri Senate for consideration. If approved there, the proposal would be placed on a statewide ballot for voters to decide.

Senator Mike Henderson has emphasized the need for caution, saying any transition away from income taxes must be handled responsibly to avoid unintended financial consequences.

Under the plan, Missouri would phase out the individual income tax based on revenue growth while expanding sales taxes to include services and digital goods. The proposal also calls for reductions in personal property taxes and other local tax rates, along with provisions aimed at protecting funding for public schools.

If the measure reaches voters, the ballot question would ask whether the Missouri Constitution should be amended to allow the General Assembly to:

• Phase out the individual income tax based on revenue growth
• Reduce personal property and other local tax rates
• Modernize the sales and use tax system
• Maintain funding protections for public education

Currently, income taxes account for about 60 percent of Missouri’s general revenue, making it the largest source of discretionary funding for state government operations.

Support for the concept appears to be mixed but leaning favorable. A recent poll conducted by Saint Louis University in partnership with YouGov found that 52 percent of likely Missouri voters support shifting toward a system that relies more heavily on sales taxes instead of income taxes.

Supporters argue the plan would modernize Missouri’s tax structure, while critics have raised concerns about how the shift could impact lower-income residents and long-term state revenues.