By Kurt Erickson
St. Louis Post-Dispatch
(TNS)
JEFFERSON CITY — Republican Gov. Mike Kehoe’s plan to ask Missouri voters to replace the state’s income tax with sales and use taxes advanced out of the Senate early Thursday, putting his top-tier issue one step closer to being on the November ballot.
Working late into the night, negotiators for the Democratic minority in the upper chamber won a key concession requiring future General Assemblies to take action over the next five years to replace revenue lost by a phaseout of the state’s 4.7% income tax.
The governor, in his second year, views the income tax as a hindrance to economic growth in the state, pointing to other high-growth states without a tax on earnings, such as Tennessee, Florida and Texas.
Opponents say the proposed tax swap will benefit the wealthy while hurting working class Missourians, who would have to spend a larger percentage of their incomes on goods and services if the scheme is approved.
Previous versions of the measure would have allowed the income tax to be reduced without requiring legislative action to replace the lost revenue—a provision that spooked opponents concerned about having enough funding in the coming years to pay for schools, social services and other programs.
The Republican governor’s initiative now goes back to the House for further debate with one month left in the Legislature’s spring session.
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Sen. Curtis Trent, R-Springfield, who handled the bill in the Senate, credited Sen. Stephen Webber, D-Columbia, for spearheading negotiations that took place over the course of more than nine hours preceding the 18-11 vote.
“I think the process worked very well,” Trent said.
Webber did not hold up the final vote, but voted “no” on the measure with his Democratic colleagues.
House Joint Resolution 173, which passed the House in March on a 98-54 vote, would ask Missouri voters 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 state’s individual income tax rate if certain revenue triggers are met. Corporate income taxes imposed on businesses would not be affected.
The Senate version contains some changes from the House, including a provision giving lawmakers five years to enact the moves needed to replace the income tax, which brings in more than $9 billion annually to the state treasury. The House version gives lawmakers three years.
On Wednesday, the Senate worked through a series of unrelated bills for more than nine hours, while closed-door negotiations over the income tax plan were underway between Republicans and Democrats.
Senate Majority Leader Tony Luetkemeyer, R-Parkville, announced a 15-minute recess at 10:30 p.m. for both caucuses to meet and discuss the proposal. The two sides convened an hour later at 11:30 pm and quickly approved the agreement.
Not all Republicans were pleased. Sen. Joe Nicola, R-Grain Valley, said he was more interested in addressing property taxes and reducing the size of government.
“I certainly don’t see the need for it,” Nicola said. “I’d like to talk about cutting spending. There’s been very little talk about that.”
Other members of the GOP supermajority cheered the proposal.
Sen. Rick Brattin, R-Harrisonville, who is running for Congress, said eliminating the income tax is “the most conservative policy” because it could lead to less government spending.
The Senate version removes automatic triggers for the income tax rate cut and the target date for eliminating the income tax.
Democrats argued the rate reduction should not be automatic, because each time it is calculated, any additional sales or use tax revenue added by lawmakers in subsequent years to offset income tax reductions would be counted in that total.
Rather than an automatic rate drop, Democrats said lawmakers should have to vote to decrease the income tax each year to avoid an imbalance in revenue collections from sales or use taxes.
A major point of their opposition is what happened when Kansas went down a similar path in 2012 under Republican Gov. Sam Brownback. That plan went awry, resulting in reduced funding for state services and a downgrade of the state’s credit rating.
Kansas lawmakers dumped the income tax elimination experiment in 2017, after declining revenues left state government financially reeling.
Kehoe’s overall concept faces opposition from business groups who are concerned about sales taxes being imposed on their products and services.
Some business groups, however, are holding their fire as the initiative moves through the process.
The Missouri Chamber of Commerce and Industry, which backed Kehoe during the 2024 election cycle, declined to comment Thursday on the Senate passage of the bill.
Under existing law the state does not impose sales taxes on services such as lawn care or haircuts. Kehoe’s proposal would allow for that, as well as higher sales tax rates on items that are currently taxed at both the state and local levels.
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© 2026 the St. Louis Post-Dispatch. Visit www.stltoday.com. Distributed by Tribune Content Agency LLC.
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