Missouri House Approves Major Tax Overhaul Plan

Proposal would reduce income taxes, expand sales taxes to services and digital goods

Mar. 19, 2026 at 10:50pm

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The Missouri House of Representatives has approved a proposal to restructure the state's tax system by reducing or replacing income taxes and expanding sales taxes to include services and digital goods. The measure passed 98-54 and now heads to the Missouri Senate. If approved there, the proposal would go before voters on a statewide ballot.

Why it matters

This tax overhaul plan represents a significant shift in Missouri's tax structure, moving away from reliance on income taxes toward a greater emphasis on sales taxes. This could have major implications for state revenue, the tax burden on individuals and businesses, and the overall economic landscape in Missouri.

The details

Under the proposal, the Missouri Constitution would be amended to phase out the individual income tax based on revenue growth, reduce personal property and other local tax rates, modernize sales and use taxes, and protect funding for public schools. A recent poll found 52% of likely Missouri voters support a system that relies more on sales taxes than income taxes. However, the plan has drawn opposition from some small business owners, advocacy groups and at least one Republican lawmaker, who argue the shift could increase costs for families and certain services.

  • The Missouri House of Representatives approved the tax overhaul proposal on March 19, 2026.

The players

Missouri House of Representatives

The lower chamber of the Missouri state legislature that approved the tax overhaul proposal.

Missouri Senate

The upper chamber of the Missouri state legislature that will now consider the tax overhaul proposal.

Missouri voters

If approved by the Missouri Senate, the tax overhaul proposal would go before voters on a statewide ballot.

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What’s next

If approved by the Missouri Senate, the tax overhaul proposal would go before voters on a statewide ballot.

The takeaway

This proposed tax overhaul in Missouri represents a significant shift away from income taxes toward a greater reliance on sales taxes, which could have major implications for the state's revenue, tax burden, and overall economic landscape. The plan faces opposition from some stakeholders who argue it could increase costs for families and businesses, but it also has support from a slim majority of likely Missouri voters according to recent polling.