Missouri Legislature Approves Income Tax Elimination

The Missouri General Assembly has taken a crucial step in the process to amend the Missouri Constitution by phasing out the state income tax and increasing the sales tax.  On April 21, 2026, the Missouri House of Representative passed HJR 173 by a vote of 95 to 59.  The process in the House started with a January 28, 2026, Missouri House of Representatives Commerce Committee hearing, at which Council for Citizens Against Government Waste Health and Science Director Eric Maus testified in favor of the income tax elimination.

Since the bill passed the Senate on April 15, 2026, by a vote of 18 to 11, the only decision remaining for Gov. Mike Kehoe (R) is when the measure will appear on the ballot.  Since he endorsed the phase out of the income tax, it is likely to be on the ballot in November 2026.

Missouri’s income tax was last modified in 1931, when the country was in the middle of the Great Depression, the St. Louis Cardinals won just their second of 11 World Series titles, and most Missourians only earned a few hundred dollars annually.  The tax code is so antiquated that any Missouri taxpayer who earns more than approximately $9,000 per year, which is 60 percent of the federal poverty level of $15,060, is automatically placed into the top income tax bracket.

Currently, six of the 8 states that border Missouri have eliminated or started to phase out their income tax, allowing them to join states that have done so and reaped significant economic benefits.  According to a January 28, 2026, Council of Economic Advisers report, states that phased out their income tax attract more high-income taxpayers, have a 16 to 19 percent increase in startups, and an average wage increase of $4,000.

Missouri has a chance to not only catch up with other states but also become a national leader in tax reform.  In 2025, Missouri became the first state to eliminate the capital gains tax.  If voters approve the phase out of the income tax, Missouri will become the only state to have done away with income and capital gains taxes.

Lawmakers in Missouri have done their part by delivering on Governor Kehoe’s plan and it is now incumbent on Missouri voters to decide whether they agree to amend the Constitution and phase out the state’s income tax over five-years.  Eliminating the income tax will make the state a more attractive destination and give taxpayers in the state an economic boost.