Why It Matters
A court ruling expected Monday could determine whether Missouri voters get to weigh in this summer on one of the most far-reaching tax restructuring proposals in state history. The outcome will also shape how the measure is described to voters if it does appear on the August 4 primary ballot.
What Happened
Cole County Circuit Judge Christopher Limbaugh heard arguments Friday in a lawsuit challenging the constitutionality of Amendment 5, a proposed constitutional change that would authorize the Missouri legislature to replace the state income tax with expanded sales taxes. At the close of the trial, Limbaugh said he would issue a ruling Monday, leaving time for any appeals before the legal deadline.
That deadline is June 9, the last date under Missouri law for courts to order changes to the August 4 primary ballot. Gov. Mike Kehoe, who moved the measure to the primary ballot last week, has called Amendment 5 his top legislative priority for the year.
Opponents argue the measure violates the Missouri Constitution’s prohibition against constitutional amendments that address more than one subject. If the judge agrees, Amendment 5 would be removed from the ballot unless an appellate court reverses that decision.
The Legal Dispute
Attorney Chuck Hatfield, representing the plaintiffs, argued that the amendment uses the word “notwithstanding” to effectively override multiple other sections of the Missouri Constitution — including provisions governing motor fuel taxes, conservation funding, and state parks — which in his view constitutes multiple subjects embedded in a single amendment.
“When you do that, you’ve got to look and see whether you’re amending other sections of the Constitution,” Hatfield said in court, characterizing the approach as a constitutional workaround.
Louis Capozzi, solicitor general in the state attorney general’s office, defended the measure, arguing that all provisions touched by the amendment relate to taxation, placing them within a single article of the Constitution. “There’s a long line of precedent saying as long as you purport to only amend one article, that’s good enough,” Capozzi said.
Both sides also disputed the ballot language approved by lawmakers. Hatfield contended the language misleads voters by implying the amendment itself would phase out the income tax, when that step would actually require subsequent legislative action. He also argued voters would not be clearly informed that the sales tax base could be significantly broadened. The attorney representing Amendment 5 supporters also asked the judge to revise the ballot summary.
By the Numbers
Missouri currently levies a general revenue sales tax of 3 percent, generating roughly $3.2 billion annually out of $13.2 billion in total general revenue. To fully replace income tax collections through the sales tax, analysts estimate the rate would need to rise by approximately 8.5 percentage points, or the taxable base would need to expand to cover an additional $300 billion in economic activity. The state’s total annual economic output is estimated at about $350 billion.
The measure would also require lawmakers to pass separate legislation setting revenue triggers to reduce the top income tax rate, currently 4.7 percent. Legislators would have five years to act on rate increases or base expansion in tandem with income tax reductions.
A political action committee backing the amendment, Missouri Promise, received a $1.9 million donation Wednesday from a Delaware-based nonprofit of the same name. A spokesman for the nonprofit declined to identify its donors, saying only that all PAC contributions are reported to the Missouri Ethics Commission as required by state law.
Zoom Out
Missouri’s proposed shift from income to sales taxation mirrors conversations in several other states where Republican-led legislatures have explored reducing or eliminating income taxes as a driver of economic competitiveness. Such proposals typically face resistance from business interests concerned about sales tax expansion and from lower-income advocacy groups who argue consumption taxes are regressive. Missouri’s debate has drawn opposition from both ends of the political spectrum — the Missouri Association of Realtors is leading business-side opposition, while the liberal Missouri Budget Project is helping organize left-leaning pushback.
The Realtors’ concern is specific: Amendment 5 would directly nullify two constitutional provisions the organization placed on the ballot through initiative petition in 2015, including a ban on taxing real estate transactions and a prohibition on extending the sales tax to goods and services not previously subject to it. For more on Missouri’s ongoing fiscal debates, see lawmakers’ recent failure to deliver property tax relief amid rising property assessments.
What’s Next
Judge Limbaugh’s ruling is expected Monday. If he allows the measure to proceed, he may also revise the ballot language. Either party can appeal before the June 9 court-order deadline. Should Amendment 5 survive legal challenges, campaigns on both sides — with millions of dollars already in play — will compete for voter support ahead of the August 4 primary. Missouri residents tracking other state budget and policy developments may find the outcome shapes the broader fiscal landscape heading into fall.