Missouri Constitutional Amendment 5
Simple majority required.Ballot wording: Shall the Missouri Constitution be amended to:Require legislative phase-out of the individual state income tax based on revenue growth, and authorize the expansion of sales and use taxes;Curtail constitutional limits on taxing goods and services; andRequire local tax rate cuts without reducing school funding if local sales tax revenue increases?The proposal has no direct impact on state or local tax revenue. If passed, implementing legislation will have an unknown impact to state and local tax revenue. If implemented, state government entities expect a reduction of $57,000 annually in income tax check-off donations and implementation costs of at least $100,000.Summary: The measure is a proposed constitutional amendment that would phase out the state income tax and allow the Legislature in future years to expand the sales tax base. If passed, there would be a five-year period for the Legislature to expand state and local sales and use taxes to include currently exempt goods and services. The expanded sales tax revenue would replace the $9 billion in revenue lost from the phased-out income tax. Voter approval wouldn't be required for tax increases enacted during this period. The amendment doesn't include any exemptions, so the sales tax could be applied to all products and services. Proponents say eliminating the income tax will increase economic competitiveness and enable Missouri to compete for residents and businesses with states that do not have income taxes. They also say local governments would be required to reduce personal property taxes and other local taxes to offset revenue generated by a broader sales tax base and that schools would be protected from state funding cuts during the five-year transition period. Opponents say the amendment would result in 80% of Missourians paying increased taxes and that people with low incomes, senior citizens and active-duty military personnel would be especially hard hit. They also worry that public schools, social services and other critical services would face cuts and that the Legislature could decide to apply the sales tax to doctor's visits, child care payments, home and car repairs and other necessary services.
