Missouri’s Path to Income Tax Elimination: Understanding Amendment 5

Missouri is set to decide on a significant shift in its tax structure with Amendment 5, a proposal that aims to phase out the state’s individual income tax. This measure, placed on the August 4, 2026, primary election ballot by Governor Mike Kehoe, represents a move to modernize the state’s tax code while incorporating protections for essential public services. The initiative is designed to gradually eliminate the income tax, contingent on state revenue growth, and includes provisions to offset potential impacts on local funding.

The Core of Amendment 5

Amendment 5, also known as HJR 173/174, proposes a constitutional change to gradually eliminate Missouri’s individual income tax. The phase-out process is directly linked to the state’s revenue growth, meaning the transition would occur over time as state finances allow. This approach is intended to ensure fiscal responsibility and prevent sudden disruptions to state services.

The amendment also addresses potential consequences for local tax revenues. It mandates reductions in property taxes and other local taxes to counterbalance any increases in local sales tax revenue that might arise from the shift away from income tax. A key component of the proposal is the commitment to preserve local funding for public schools, ensuring that educational institutions are not negatively affected by the tax overhaul.

Governor’s Rationale and Legislative Role

Governor Kehoe has framed Amendment 5 as a necessary modernization of Missouri’s tax system. He highlighted that placing the measure on the ballot provides the Missouri General Assembly with additional time to prepare for the subsequent phases of implementation. This extended preparation period is intended to allow lawmakers to carefully plan the mechanics of the tax reductions and revenue adjustments.

The governor emphasized that the proposal aligns with a broader trend of voter support for economic policy changes aimed at making Missouri more competitive. By putting the decision before the voters, the state is seeking a clear direction on its fiscal future. The legislative role remains critical, as lawmakers will be responsible for defining the specific revenue growth metrics that trigger the phase-out and for enacting the necessary tax reduction measures.

Broader Ballot Context

Amendment 5 is not the only significant question Missouri voters will consider on August 4, 2026. The ballot will also feature Amendment 1, Amendment 2 (HJR 23/3), and Amendment 4 (HJR 3), indicating a busy election day for statewide policy decisions. The inclusion of Amendment 5 means that voters will directly decide whether to embed the income tax phase-out, along with its associated protections and offsets, into the Missouri Constitution. This direct vote signifies a major step in potentially reshaping the state’s financial landscape.