Voters to decide the fate of Missouri’s income tax with Amendment 5

Key Points:

• Missouri voters will decide on Amendment 5, which would allow lawmakers to expand sales and use taxes to eliminate the state income tax, aiming to spur economic growth but raising concerns about increased living costs.
• Supporters, including State Rep. Bishop Davidson and Auditor Scott Fitzpatrick, argue the amendment would attract residents and modernize tax revenue sources, citing states like Tennessee as successful examples without income tax.
• Opponents, led by the Missouri Budget Project and AARP Missouri, warn the amendment would disproportionately burden low- and middle-income residents, potentially raising sales tax rates to as high as 16%, and negatively impact seniors and vulnerable populations.
• The amendment includes a five-year window to expand transaction-based taxes and requires local tax rollbacks if revenues increase, though critics doubt property tax reductions will materialize and express concern over the lack of specified exemptions.
• Lawmakers can eliminate the income tax without voter approval, but Amendment 5 would constitutionally prevent reinstating it without another amendment, placing significant power in legislative hands to reshape Missouri’s tax system.