Amendment 5 is Gov. Mike Kehoe’s top priority for the year, the most complicated measure on the Aug. 4 primary ballot, and the one drawing the most money and the hardest-fought legal battle. At its core it asks Missourians to start down a long road: phasing out the state personal income tax and leaning more heavily on sales taxes to make up the difference.
Here is what it would do. The amendment directs lawmakers to set “revenue triggers,” thresholds of state revenue growth that, once met, would lower the top income tax rate step by step toward zero. The measure does not specify what those triggers are; it leaves the numbers to the legislature. To replace the money the income tax now brings in, Amendment 5 gives lawmakers a five-year window to broaden the sales tax, either by taxing goods and services that are exempt today or by raising the rate. It also lifts two limits that voters, at the urging of the Missouri Association of Realtors, wrote into the constitution: one barring a sales tax on real estate sales, and one permanently blocking lawmakers from extending the sales tax to services and other transactions not already covered. And it exempts those new or expanded sales taxes from the constitutional requirement that voters approve large tax increases.
A few numbers show the scale, and they are the heart of the fight. Missouri’s top income tax rate is 4.7 percent, applied to taxable income above roughly $9,200, and the income tax is the state’s largest revenue source; it brings in about $8.5 billion a year, close to two-thirds of general revenue. The nonpartisan Missouri Budget Project estimates that replacing that money through the sales tax alone, without taxing anything new, would require nearly tripling the state’s 3 percent general sales tax to about 10.7 percent, which would push the average combined state and local rate to around 16 percent, and higher in some towns. The group concludes there is no realistic way to fully replace the lost revenue, and warns, along with Democratic lawmakers, that the resulting gap would force deep cuts to state services, with public schools the largest exposure. It also projects that about 80 percent of Missourians would pay more, the median household around $500 a year, while the wealthiest would see a cut. The state is already projecting a roughly $2 billion shortfall in the coming budget year from earlier tax cuts, before any change Amendment 5 would bring.
Supporters dispute that the plan would blow a hole in the budget. They note that the income tax cuts are tied to revenue triggers, falling only as state revenue grows, and that Missouri lowered the top rate from 6 percent to 4.7 percent in recent years without losing revenue. They also stress that Amendment 5 itself raises no tax; it sets a framework, and a future legislature would still have to enact any sales tax expansion. Opponents counter that the amendment requires the income tax to be eliminated whether or not the replacement revenue materializes.
One feature sits at the center of that argument, and the ballot summary does not spell it out. Any sales tax increase the amendment allows must be paired with a matching income tax cut in the same bill, a requirement supporters call revenue neutral and lawmakers in both parties have described as a tax shift rather than a tax cut. Supporters hold it up as the guardrail that keeps the swap from raising the overall burden, and say a net increase is not the intent. Critics answer that the neutrality is measured on revenue projected when a bill passes, not on what is later collected, with no automatic correction built in; and that because the public vote on tax increases is suspended during the transition, a package could be certified as revenue neutral on paper while running a net increase in practice. The question has not been tested. How it resolves would depend on how future legislatures write the bills and how a court reads the requirement, and whether the gap stays theoretical or proves decisive is, for now, unknown.
The amendment reaches further into the tax code as well. It would allow a sales tax on motor fuel for the first time and free that money from the constitutional rule sending fuel taxes to highways, and it would direct the state auditor to lower the dedicated sales tax rates for the Department of Conservation and for state parks and soil and water, the same parks tax on this ballot as Amendment 1, so a broader base does not hand those programs an unintended windfall. Local governments would likewise have to trim rates if a wider tax base produced a revenue windfall, without cutting school funding.
Getting Amendment 5 before voters, and settling what they will read, took months and the courts. The Republican-led legislature referred the measure as House Joint Resolution 173; it cleared the House 95 to 59, with nine Republicans joining Democrats in opposition. Kehoe placed it on the August primary rather than the November general election, saying lawmakers would need time to prepare if it passes. Opponents then sued, arguing the proposal illegally crosses more than one article of the constitution and covers more than one subject. A Cole County judge disagreed on June 1 and kept it on the ballot. Four days later the Western District Court of Appeals agreed the measure could stay, but ruled its ballot summary was not fair because it did not tell voters the proposal expands the legislature’s sales tax authority and suspends existing constitutional limits on taxation. The appeals court rewrote the summary to put the sales tax expansion first. Proponents, including the attorney general’s office, asked the Missouri Supreme Court to undo that rewrite; on June 8 the court declined, and the revised summary became final. Kehoe and Attorney General Catherine Hanaway sharply criticized the rewrite as judicial overreach; the appeals court said its task was to make sure voters understood what the measure actually does.
Supporters cast Amendment 5 as overdue modernization. They argue Missouri’s tax code was built for an economy of physical goods and has not kept pace with a service economy, that eliminating the income tax would make the state more competitive, and that the phaseout is gradual and tied to revenue growth rather than automatic. They also stress that the amendment itself does not raise any tax; it authorizes a future shift that lawmakers would still have to enact. As a Republican sponsor of the income tax plan put it in an earlier hearing, the measure “doesn’t tax any services whatsoever”; it opens the door to that debate.
Opponents, who include both business interests and groups on the left, call it the largest sales tax expansion in state history. The Realtors-backed committee Missourians for Fair Taxation brands it the “Everything Tax” and warns it would reach everyday services, from haircuts and car repairs to health care and home sales, while stripping away the voter-approval protection on big tax increases. A separate committee, No Everything Tax, is organizing opposition from the left. Supporters are funded mainly by Missouri Promise, a political action committee that has taken in about $1.9 million from a Delaware nonprofit whose donors it has declined to name, with a second committee, Put Missouri First, also backing it. The contest is expected to be among the most expensive of the summer.
A yes vote begins the process of phasing out the income tax and gives lawmakers the authority to broaden sales taxes to replace it. A no vote leaves the current tax structure and the existing constitutional limits in place; under the court-revised ballot language, a no vote does not change lawmakers’ existing power to cut or eliminate the income tax on their own.
This concludes our four-part look at the Aug. 4 ballot. The full series, on Amendments 1, 2, 4, and 5, is available on our elections page. Amendment 3, on abortion, is set for the November general election.
ON THE BALLOT
The certified ballot summary was rewritten by the Missouri Western District Court of Appeals in June; the Missouri Supreme Court declined to disturb it, so the revised version is final. The court ordered the summary to lead with the proposal’s expansion of the legislature’s sales and use tax authority and its suspension of existing constitutional limits on taxation. One provision asks voters whether to “require local tax rate cuts without reducing school funding if local sales tax revenue increases.” The full official text is on the Missouri Secretary of State’s 2026 ballot measures page.
A YES VOTE starts a phaseout of the state income tax and lets lawmakers broaden sales taxes to replace the lost revenue.
A NO VOTE keeps the current tax structure and the existing constitutional limits on what can be taxed.
KEY POINTS
- The income tax phaseout is tied to revenue triggers the measure does not specify.
- Gives lawmakers five years to broaden the sales tax base or raise the rate.
- Requires any sales tax increase to be matched by an income tax cut in the same bill, a swap supporters call revenue neutral.
- Lifts two Realtor-backed constitutional limits: no sales tax on real estate sales; no extending the sales tax to services not already taxed.
- Exempts the new sales taxes from the requirement of a statewide vote on tax increases.
- Directs the state auditor to reset the dedicated conservation and parks tax rates.
THE NUMBERS
- Income tax revenue: about $8.5 billion a year, close to two-thirds of state general revenue.
- Current combined state and local sales tax: 4.225 percent average.
- Replacing the income tax without broadening the base would require roughly tripling the 3 percent state rate to about 10.7 percent, a combined average near 16 percent (nonpartisan Missouri Budget Project).
MONEY AND COURTS
- For: Missouri Promise (about $1.9 million from a Delaware nonprofit); Put Missouri First.
- Against: Missourians for Fair Taxation (Missouri Association of Realtors); No Everything Tax (organizing from the left).
- Referred as HJR 173; placed on the Aug. 4 ballot by the Governor; summary revised by the appeals court June 5; Supreme Court declined review June 8.