By Kurt Erickson
St. Louis Post-Dispatch
(TNS)
JEFFERSON CITY — The Missouri House Thursday approved Gov. Mike Kehoe’s plan to switch the state’s main source of revenue from income taxes to sales taxes.
On a 98-54 vote, the proposed constitutional amendment was sent to the Senate the day before lawmakers adjourned for a weeklong spring break. The lone Democrat to vote in favor of the plan was Rep. Marlene Terry of north St. Louis, who has sided with Republicans on other divisive issues.
House Joint Resolution 173 will ask Missouri voters in November to lift a prohibition in the Constitution on the expansion of sales and use taxes put in place by voters in 2016.
If approved, it would give lawmakers a green light to use sales and use tax revenue to begin lowering the 4.7% individual income tax rate if certain revenue triggers are met. Corporate income taxes imposed on businesses would not be affected.
Democratic lawmakers said it is the wrong time to shift away from a progressive tax to a regressive tax that will disproportionately affect lower-income families.
“This proposal doesn’t eliminate taxes. It simply shifts them,” said Rep. Yolanda Young, D-Kansas City. “Remember all that glitters is not gold.”
“This resolution will be the largest sales tax hike in our history,” added House Minority Leader Ashley Aune, D-Kansas City.
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Rep. Mark Matthiesen, R-O’Fallon, predicted voters will support the change, requiring lawmakers to move quickly to scour the current sales and use tax base for potential taxation. He said that will trigger an all-out lobbying campaign by businesses and industry groups affected by possible tax increases.
“We’re going to have to make tough decisions next year. We’re going to have special interests from all over the state … knocking on our doors saying, ‘Not me. Not me,’” Matthiesen said.
The current ban on expanding state sales and use taxes was put in place in 2016 by voters after a multimillion-dollar campaign by the Missouri Realtors Association, which worried at the time that Missouri might eliminate its income tax and switch instead to higher, broader sales taxes affecting the housing industry.
The genesis of that ballot initiative, which was approved by voters by a 57-43 margin, was a proposal floated by retired financier and political megadonor Rex Sinquefield of St. Louis in 2010 to replace the state income tax.
Kehoe’s plan to convince voters to lift the prohibition would be a long-sought political victory for Sinquefield, who contributed $372,525 to candidates last year.
Kehoe, who is in his second year in office, outlined the plan in January in his State of the State address. He wants voters to grant lawmakers broad authority to expand the state’s 4.2% sales tax rate to currently untaxed goods and services. Services such as accounting fees for tax preparation or software subscriptions are not currently taxed, and goods currently exempted include prescription drugs and home utilities.
The governor has said protections must be in place to protect agriculture, health care and real estate from new sales taxes, but there are no guardrails on those in the legislation. The House sponsor, Rep. Bishop Davidson, R-Republic, who is carrying the bill on behalf of House Speaker Jon Patterson, said those protections will be addressed if the voters sign off on the plan in November.
The proposal also seeks to protect school funding by including language barring counties from reducing funding to schools.
Missouri collected $9.2 billion from the individual income tax last year. Generating the same revenue on the current sales tax base would require an additional sales tax of about 8.5%. Lawmakers could broaden the base of sales and service taxes like haircuts, tax preparation or lawn services to soften the reliance on higher sales taxes on basic items.
Photo credit: TriggerPhoto/iStock
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© 2026 the St. Louis Post-Dispatch. Visit www.stltoday.com. Distributed by Tribune Content Agency LLC.
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Tags: Income Taxes, Missouri, sales and use tax, Sales Tax, sales taxes, Taxes
