04/01/2026
“If we send this to the voters, we are asking the voters to trust us,” he said. (State Rep. Matthiesen, O'Fallon)
I have been getting a lot of questions about the proposal to eliminate Missouri's income tax and replace it with a sales tax. Admittedly, I haven't had time to research this thoroughly, but I think we need to PROCEED WITH EXTREME CAUTION.
No doubt, the devil is in the details, but it sure sounds like a bad idea to me. The part about voters will have to "trust us" apparently refers to the fact that the legislature will choose which goods and services that are currently NOT SUBJECT to sales tax will be taxed under the new sales tax. Haircuts? Legal fees? Tax preparation? Veterinary services? Car repairs? Streaming services? Cleaning services? (Services are generally not subject to sales tax.) Utilities are already subject to sales tax. Will that sales tax increase?
As a tax lady, it's my opinion that Missourians in general and my clients in particular, do not face an onerous state income tax burden. I see a lot of out-of-state tax returns, and Missouri income tax is on the low end of states that impose an income tax. Missouri's property taxes are very low compared to neighboring states. Sales tax already feels high to me, though I suppose it's about average.
Missouri does not tax social security. The Missouri pension exemption often results in complete exemption of retirement income from state income tax. Missouri does not tax long-term or short-term capital gains. Missouri does not tax crop insurance proceeds or USDA disaster payments to farmers.
Missouri's income tax is so low that I often have clients who try to take advantage of various tax credit programs and they find they don't even have enough Mo income tax liability for it to matter.
I've heard there is supposed to be some way for lower-income Missourians to get some sort of rebate to make up for the higher sales tax. Does that mean Missourians who wouldn't ordinarily need to file a tax return are going to hire me now to help them get that? And they're going to then have to wait on DOR to send them a refund? (probably days, sometimes weeks, maybe months, but that's a topic for another post). Sounds like job security to me, but it doesn't sound like a win for the client.
It's pretty clear to me who this proposal benefits. It's not me, and it's not my clients. I noticed in the article that our State Rep. Gregg Sharpe, along with three other rural republicans voted against the measure. Thank you, Mr. Sharpe. One democrat voted for it. She's from St. Louis.
The constitutional amendment that would eliminate Missouri income tax passed the Missouri House of Representatives on Thursday.
