Missouri voters had one job last night.
They did it decisively.
Amendment 5 — the proposed constitutional amendment that would have given Missouri lawmakers the power to eliminate the state income tax and expand sales and use taxes to replace the lost revenue — failed 83% to 16%.
"Amendments 4 and 5 have been buried so deep in citizen rejection, they should never come back," said Scott Charton, spokesman for Missourians for Fair Taxation and Missourians for Fair Governance.
83% to 16% is not a close race. It's not even a defeat. It's a repudiation — one of the most lopsided rejections of a major tax ballot measure in recent Missouri history. And it happened on a primary election ballot where Governor Mike Kehoe — one of Amendment 5's most prominent champions — put his full political capital behind it.
We've been covering this story since May. This is the final chapter.
We covered the full details of Amendment 5 when it was first proposed and when it landed on the August 4 ballot. For readers just catching up, here's the short version.
Missouri's current state income tax is nearly flat — every dollar earned over $9,191 per year is taxed at 4.7%. That income tax generates around $8.5 billion in state revenue annually — more than half of the state's general revenue.
Amendment 5 would have:
Rep. Bishop Davidson, R-Republic, who sponsored the amendment, said he believed the possible future sales tax would have been between 4% and 6% higher than current levels to replace the lost income tax revenue. komu.com
Missouri's current state sales tax is 4.225%, not including local taxes. Combined with local additions, many Missouri residents already pay over 9% in combined sales tax. A 4% to 6% increase on top of that would have pushed combined rates toward 13% to 15% in some jurisdictions.
The 83% rejection isn't just a policy outcome — it's a data point about what Missouri voters believe. Understanding why Amendment 5 failed this badly tells us something important about the limits of the income-to-sales-tax trade.
Opposition to Amendment 5 came from a coalition that cut across party lines. The Missouri REALTORS ran the most prominent media campaign against it, expressing concern about the broad authority the amendment would give to the legislature. The Missouri Budget Project pointed out the regressive nature of states reliant on sales taxes — where poorer residents pay a higher share of their income in state taxes than wealthy ones do.
The Missouri Budget Project said 80% of people in the state would have seen a net tax increase, with the average Missourian paying over $500 more in taxes annually. Springfield Daily Citizen
Those numbers were devastating to the campaign. An amendment framed as tax relief was producing data showing the majority of voters would pay more — not less. The political message and the fiscal reality were directly contradicting each other.
Jay Hardenbrook with AARP Missouri said he hopes the failure of Amendment 5 sends the message that there is a desire for tax relief, just not in this way.
That's the most important sentence in last night's results. Missouri voters aren't saying they don't want tax cuts. They're saying they don't want their income tax replaced with an expanded sales tax that would cost them more overall.
Missourians for Fair Taxation and Missourians for Fair Governance — both funded by the Missouri REALTORS — ran the opposition campaign that Charton said buried Amendments 4 and 5.
The REALTORS' involvement is strategically significant. Real estate transactions — both the sale of property and real estate services — were potentially in scope under Amendment 5's broad authorization to expand the sales and use tax base. An amendment that said legislators could tax "any goods and services" was a direct threat to industries currently exempt, and the REALTORS mobilized accordingly.
Their involvement also reflects a broader pattern: when states propose expanding the sales tax base, the industries currently exempt don't wait to find out if they'll be targeted. They fight the expansion proactively. Missouri's failure is partly a story about what happens when multiple industries with economic clout and organized lobbying capacity all oppose the same measure simultaneously.
In a statement issued Tuesday evening, Kehoe said that while Amendment 5 failed, the work "is far from over." "I remain committed to working with the General Assembly in the years ahead on ways to continue cutting taxes, growing our state's economy, and protecting the paychecks of hard-working Missourians." komu.com
The governor's statement is measured but clear — he's not abandoning the income tax reduction agenda, just the specific mechanism. Missouri has already been gradually cutting its income tax rate through legislative action — from 5.9% in 2018 to 4.7% today — without needing a constitutional amendment to do it. That path remains open.
Lawmakers didn't need voter approval to eliminate the income tax — in prior sessions, they already passed income tax cuts. The constitutional amendment was necessary specifically to authorize the expanded sales tax that would replace the revenue. Without that authorization, the legislature can cut income taxes but can't replace the revenue with a broader sales tax base. Springfield Daily Citizen
Kehoe's next move is likely to continue pursuing income tax rate cuts through the legislature while waiting for the political environment to shift enough to try a constitutional amendment again. Given last night's 83% rejection, that shift will take years — not months.
For Missouri businesses and residents, last night's result has immediate practical consequences.
Missouri's income tax stays at 4.7% — no phaseout, no timeline, no five-year clock. The current sales and use tax rate of 4.225% stays as is — no legislative expansion authority, no ability to tax currently exempt services without a new voter authorization.
The constitutional limits on taxing goods and services that Amendment 5 would have curtailed remain in full force. The legislature cannot expand the sales tax base without another ballot measure — and any future attempt faces the formidable precedent of 83% opposition.
For service businesses — law firms, accounting practices, medical offices, real estate services — this result removes a specific threat that had been hanging over their tax status since the amendment was proposed. Services are taxable in Missouri only where specifically enumerated by statute. Amendment 5 would have opened the door to taxing virtually any service without further voter approval. That door is now firmly closed.
For consumers, the most direct impact is what didn't happen. Combined Missouri sales tax rates — currently 9.68% on average — will not climb toward 13% or 15% in this budget cycle.
Missouri's result lands in a national conversation about income-to-sales-tax trade-offs that is actively happening in multiple states.
Alaska is considering a statewide sales tax for the first time since 1980. South Dakota's income-tax-free model continues to influence legislatures. Louisiana has already made the trade — highest combined sales tax in the country at 10.13%, no income tax on investments. Tennessee funds its entire government through sales tax at 9.61% combined.
These states are often cited as models by advocates of income tax elimination. Missouri's 83% rejection adds a significant data point to that debate: voters who are asked to make the trade explicitly and in a binding constitutional form may respond very differently than voters in states where the trade happened gradually over decades.
The Missouri Budget Project's finding — that 80% of Missourians would have seen a net tax increase — is the number that travels furthest from this result. Every state considering a similar shift will now cite Missouri's analysis. Every legislature that proposes it will face opponents armed with 83%.
Income taxes made up 61% of Missouri's general revenue funds — a figure that underscores why the amendment's failure wasn't just a policy defeat for Kehoe, but a structural affirmation of how Missouri funds its government.
We covered this detail in our earlier reporting — a lawsuit filed in Cole County Circuit Court argued that Amendment 5 bundled too many subjects into a single ballot question, violating Missouri's constitution.
The ballot question asked voters whether they wanted to require the legislative phase-out of the individual state income tax, authorize the expansion of sales and use taxes, curtail constitutional limits on taxing goods and services, and require local tax rate cuts — all in a single yes or no question. FOX 2
The court ultimately allowed the measure to proceed to the ballot. Voters didn't need the lawsuit to stop it. They did it themselves, by a margin of 83% to 16%.
Missouri's sales tax structure is stable. The threat of a dramatically expanded base — covering services, healthcare, real estate, and anything else the legislature might have chosen — is gone for this political cycle.
For businesses that were modeling potential exposure under an expanded Missouri sales tax base — particularly service businesses currently exempt — that planning exercise is no longer urgent. Missouri's tax landscape in 2027 will look essentially like it does today.
For businesses selling goods into Missouri — the categories currently taxable under Missouri's 4.225% state rate and applicable local rates — nothing changes. Rates stay where they are. Filing obligations stay the same. Compliance requirements are unchanged.
The Missouri sales tax story that started in May with a House vote, ran through Governor Kehoe's August ballot decision, survived a lawsuit, and ended last night with 83% of Missouri voters saying no — is over.
For now.
Operating a business in Missouri and want to understand your current sales tax compliance obligations — or planning ahead for what Missouri's tax landscape looks like in 2027 and beyond? Book a free consultation with our team at sales.tax. We'll walk through your specific situation and make sure your compliance is current under Missouri's existing rules.