On Aug. 4, voters will decide if they want to require the Missouri General Assembly to eliminate the state individual income tax.
Amendment 5, a proposed revision to the Missouri Constitution, would allow lawmakers to expand the sales tax on any good or service to make up for the lost revenue.
Supporters of the amendment, including Gov. Mike Kehoe, say it will help attract businesses to the state, create jobs and modernize Missouri’s tax code.
Opponents worry passing Amendment 5 will harm low- to middle-income households and instead offer more tax relief to wealthier residents.
Here are some common questions related to Amendment 5:
How much income tax revenue would lawmakers have to replace?
Individual income tax revenue accounted for 68% of the state’s general tax revenue in fiscal year 2025, totaling $9.17 billion.
Meanwhile, the state collected $3.22 billion in sales and use tax revenue, which made up nearly 24% of the general tax revenue.
To fill the gap left by eliminating the individual income tax, the Missouri General Assembly would be allowed five years to increase the sales tax base and expand it to any good or service.
Lawmakers would also be allowed to enact any legislation over time that lowers the top individual income tax rate through general revenue triggers.
Does Amendment 5 exempt any good or service from taxation?
The amendment opens the door for any good or service to be taxed in order to lower and eventually remove the individual income tax.
Kehoe said during his 2026 State of the State address that he’d like tax exemptions placed on services related to agriculture, real estate and healthcare, but no exemptions exist in the amendment’s language.
Opponents of Amendment 5 have criticized the amendment for its lack of detail.
State Rep. Rudy Veit, R-Wardsville, one of the nine House Republicans who voted against Amendment 5 being placed on the ballot, noted that the preference of services that shouldn’t be taxed can change from session to session.
“There’s no clear delineation of what we’re going to tax,” Veit said. “They said the other day that we’re not going to tax real estate, healthcare or agriculture, well that’s this session. Our session changes every year; there’s nothing in the constitution that protects us from changing those in the future.”
State Rep. John Martin, R-Columbia, a supporter of Amendment 5, said it is important for constitutional amendments to not be too specific because of how permanent they are.
“It’s not actually in the amendment that says we’re going to tax A, B, C, D, E, because it’s not wise to put that type of language in a constitution,” Martin said.
He said, as an example, if Amendment 5 passes and the legislature decides to tax a service, such as car repairs, they can change it later. But if the constitution lists certain specific services to be taxed, the state would have to amend the constitution to change it.
The Missouri Budget Project, a nonprofit that works to educate the public on tax policy and the state’s budget, calculated the base sales tax would need to increase from the current 4.225% to 10.7% to replace the individual income tax revenue, but that’s only if the sales tax wasn’t expanded to services.
Jessica Ann, a policy analyst with the Missouri Budget Project, said it is harder to project what the impact would be without knowing the specific services the state plans to tax.
“The fact that we can’t even do estimates about how this could impact people because there are too few details is a pretty terrifying thing,” Ann said. “Because that means if we can’t do it, that means the state can’t do it.”
Martin, a member of the House Budget Committee and subcommittee on appropriations for education, said he was unaware of any preferred strategy for how the sales tax would be expanded if Amendment 5 were approved.
Rep. Bishop Davidson, R-Republic, a co-sponsor of Amendment 5, said the state’s income tax is inflating the cost of every good and service in Missouri including necessities.
“I think we should eliminate the income tax and replace it with a fairer and more transparent sales tax, and I think we should exempt necessities,” Davidson said. “I think healthcare, groceries, agriculture and real estate are necessities.”
What constitutional provisions does Amendment 5 override?
Passing Amendment 5 would overrule a 2016 amendment voters approved by 56% that prohibits lawmakers from placing a sales tax on any services that were not taxed on or before Jan. 1, 2015.
Opponents of Amendment 5 have argued it would also override the Hancock Amendment, a 1980 provision that voters approved to prohibit the state from increasing taxes through a ratio between total state revenues and the personal income of Missouri taxpayers.
Davidson said it does not go against the Hancock Amendment, noting it falls in line with the 1996 adjustment that allowed the legislature a roughly $100 million revenue cap to increase taxes.
“It doesn’t say rate increases have to be approved by voters, it says new revenue rate increases have to be approved by voters,” Davidson said of the Hancock Amendment. “Currently, the legislature is able to raise sales tax rates as long as they reduce income tax rates, and they have a revenue limit of about $100 million.”
Davidson added that since Amendment 5 would require the expansion of the state’s sales tax base to be revenue neutral by lowering the individual income tax, it aligns with previous constitutional provisions.
“No one seems to actually have read anything about how our constitutional processes work, and it’s actually incredible,” Davidson said.
How do opponents and supporters think passing Amendment 5 would affect Missouri taxpayers?
Martin sees passing Amendment 5 as putting money back in the pockets of consumers, allowing Missouri taxpayers to choose where they spend money instead of government officials.
Being a business owner, Martin also said the amendment would support his workers, who would stop seeing money taken out of their paychecks.
“When people’s paychecks are bigger, and they choose where that money’s going to be spent, it moves the economy,” Martin said.
“We want to keep our best talent right here and encourage companies to come here,” he added. “I mean, some of the really high tax states, the New Yorks, the Californias, things like that, people are leaving.”
Davidson said the average Missouri taxpayer can expect to have between $2,704 to $2,872 more after adjustments each year if Amendment 5 were to pass, according to the Council of Economic Advisers.
The Institute on Taxation and Economic Policy has come out against the amendment, releasing an analysis that found the middle 20% of the state’s income bracket, which are households that make from $49,100 to $79,700, would pay an average of $535 more per year in overall taxes if Amendment 5 passed.
Veit said he’s heard concerns from his constituents that run small businesses that the amendment wouldn’t offer support to service industries as owners could have to start filing taxes they never had to before.
“It’s hard on rural farmers, it’s hard on small businesses,” Veit said. “They’ve got to do a whole other bookkeeping section in their books if they have to start charging (sales taxes) for their services.”