Lawsuit challenges Missouri ballot plan to phase out income tax and expand sales tax
A lawsuit filed in Cole County Circuit Court challenges Missouri’s proposed 2026 ballot amendment to phase out the state’s income tax and expand sales tax, arguing it violates constitutional limits by bundling multiple subjects and using misleading language. The measure, backed by Governor Mike Kehoe, would allow lawmakers to replace the top 4.7% income tax with a sales tax increase, but critics say it improperly expands the role of the state auditor and forces voters to accept unrelated provisions.
A lawsuit was filed in Cole County Circuit Court on behalf of a Missouri resident to block a proposed constitutional amendment from appearing on the 2026 ballot. The amendment, approved by the Missouri legislature last month, would allow lawmakers to phase out the state’s individual income tax and expand sales tax to replace lost revenue. Governor Mike Kehoe has made eliminating the income tax a priority, arguing it would make Missouri more competitive with states that do not tax individual income. The lawsuit, filed by attorney Chuck Hatfield, argues the proposal violates Missouri’s constitutional limits on ballot measures by including multiple unrelated subjects. It claims voters supporting income tax elimination could be forced to accept provisions they oppose, such as changes to road funds, local taxes, or expanded sales tax coverage. The amendment would also assign the state auditor a new role in calculating tax rate reductions, which the lawsuit argues exceeds the auditor’s constitutional authority. If passed, the amendment would direct lawmakers to set a revenue baseline and triggers for phased income tax reductions, with a five-year deadline to pass a new sales tax law tied to income tax cuts. Currently, Missouri’s income tax tops at 4.7% for taxable incomes over $9,200 annually, while sales tax ranges from 7% to 12% depending on location, excluding services and certain exemptions like groceries and prescription drugs. The proposal would require expanding the sales tax to replace roughly 65% of state revenue currently derived from income taxes. Critics warn this could increase the sales tax rate by up to 8.5% without broadening its scope to services or real estate. The lawsuit also challenges the ballot language as misleading, demanding the court rewrite the summary statement voters would see. Secretary of State Denny Hoskins, named as a respondent, did not provide a comment. The measure is expected on the November 2026 ballot unless Governor Kehoe delays it, leaving the legal challenge as a key hurdle for the proposed tax overhaul.
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