Missouri House approves plan to replace income tax with expanded sales tax

The Missouri House has approved a plan that could bring the state's individual income tax to ZERO.

If the state Senate also passes the bill, it would go to voters in November.

The Missouri Independent reports the measure would give lawmakers three years to decide which currently untaxed goods and services would lose their exemption to generate the money needed to replace the revenue from income taxes.

The top income tax rate would decline by 0.01 percentage points for every $20 million in general revenue in excess of the $13.43 billion collected in the year that ended June 30.

Read what Governor Mike Kehoe had to say about it below:

"This week, the Missouri House took an important step in building our state’s foundation for long term economic growth. I appreciate the efforts of Speaker Patterson, Representative Davidson, and the members of the Missouri House to pass HJR 173/174 and advance a bold conversation on eliminating Missouri’s individual income tax.

By putting this question before Missourians, the House has demonstrated leadership and a clear commitment to making our state more competitive, more free, more prosperous, and more attractive for families and job creators.

Across America, families and businesses are increasingly “voting with their feet.” They are choosing to live and invest in states that allow them to keep more of what they earn. For years, states without an individual income tax have demonstrated stronger population growth, stronger job creation, and greater economic opportunity. These states are proving that when government takes less, opportunity grows more.

The data proves it. Over the last decade, states like Tennessee, Florida, and Texas, all of which have no personal income tax, have become magnets for growth. Between 2016 and 2025, more than two million Americans moved to Florida and nearly two million more moved to Texas.

Since 2021, twenty-six states have reduced personal income tax rates in an effort to stay competitive. Our neighboring states are pursuing bold reforms to strengthen their economies and attract investment.

While Missouri has taken meaningful steps to lower taxes, the reality is that standing still in today’s economic environment means falling behind. Missouri must compete.

But this debate is not just about rankings or economic reports. It is about real Missouri families and the everyday decisions they face.

It means a working mom who has been putting off dental care because of out-of-pocket costs can finally afford braces for her child. It means a construction worker can finally replace a broken washer without putting it on a credit card. Eliminating the income tax would allow workers to keep more of what they earn and create opportunity in very real ways.

I look forward to the Missouri Senate continuing this conversation on how this proposal can make Missouri one of the most competitive, opportunity driven states in America."