Today is the deadline.
Missouri Governor Mike Kehoe has until May 22 to decide whether the state's proposed constitutional amendment — which would give lawmakers power to expand the sales tax and phase out the income tax — will appear on the August 4 primary ballot or wait for the November 3 general election.
But there's a new wrinkle that wasn't there a week ago.
A lawsuit filed in Cole County Circuit Court is now seeking to knock the proposed amendment off the ballot entirely — arguing that legislators bundled too many subjects into one proposal and wrote misleading ballot language.
Missouri's biggest tax fight in a generation just got a lot more complicated.
The amendment, passed by the Missouri House 95-59 and approved by the Senate, would amend the Missouri Constitution to:
Missouri gets about 65% of its state revenue from income tax and about 22% from sales tax. The math is stark: to replace income tax revenue without expanding the sales tax base, the state would need to increase its sales tax rate by as much as 8.5%.
Which is why expanding what gets taxed — not just the rate — is central to the plan.
Kehoe's decision today isn't just procedural. It's strategic.
Governors who have used this power typically shift proposed ballot measures to the August primary, which usually has lower turnout. Lower turnout generally favors motivated, organized voter blocs — in this case, the business community and tax reform advocates who have been championing this proposal.
But the historical record cuts both ways. In 2020, Gov. Parson moved Medicaid expansion to August and it passed 53-47. But in 2018, lawmakers moved a right-to-work referendum to August — and voters overwhelmingly repealed it.
A recent poll from Torchlight Strategies found that around 37% of likely voters would support eliminating the income tax, while around 49% would oppose it. Those numbers suggest the amendment faces an uphill battle regardless of which election it lands on. Mass.gov
Just days ago, a new threat emerged that could sideline the debate entirely.
The lawsuit, filed by attorney Chuck Hatfield on behalf of a Missouri resident, argues that legislators bundled too many subjects into a single ballot proposal — a violation of Missouri's constitution, which generally requires ballot measures to address a single subject.
The lawsuit also challenges the ballot summary language approved by lawmakers, arguing it does not make clear that voters would be authorizing a broader sales tax expansion in order to replace income tax revenue. Galvix
The ballot summary asks voters whether the Missouri Constitution should be amended to "phase-out the individual income tax based on revenue growth," "reduce personal property and other local taxes when local revenues increase," "modify the sales and use tax to eliminate income tax and reduce local taxes," and "protect local funding for public schools and other purposes."
Critics say that's four separate policy questions bundled into one yes or no vote — and that average voters have no way of understanding that a "yes" on income tax elimination is simultaneously a "yes" on expanding sales taxes to services they've never paid tax on before.
The lawsuit asks the court to permanently block Missouri's Secretary of State from placing the measure on any ballot.
Governor Kehoe has tried to reassure Missourians worried about what a sales tax expansion could look like in practice.
Kehoe has said he would not support expanding the sales tax to agriculture, health care, or real estate. But given that there are no specific carveouts in the amendment itself, it would be up to Kehoe and the legislature to prevent those expansions — not voters. Shopify
That gap between the governor's promises and the amendment's actual language is precisely what opponents are hammering. The Missouri Bar and the Missouri Association of Realtors — two powerful groups with real experience in ballot campaigns — have both come out against the plan.
House Minority Leader Ashley Aune put it directly: "Where are we going to get that revenue? We're going to get that revenue off the backs of Missourians who are living paycheck to paycheck, seniors who already can't afford their medications or to stay in their homes." Mass.gov
The scale of what's being proposed is worth sitting with for a moment.
Missouri's individual income tax raises roughly $8.5 to $9 billion every year — about 60 to 65% of state general revenue. It is the largest source of funding for schools, public safety, and core state services. Avalara
Kehoe frames it simply: "Nine billion a year comes out of their pocket and goes to the government. We're proposing that they keep that money and make the decisions on how they spend that." Shopify
Opponents frame it just as simply: that $9 billion has to come from somewhere. And if it comes from an expanded sales tax, the burden shifts from income earners — where the tax is progressive — to consumers at the register, where the tax is the same for everyone regardless of what they earn.
For businesses operating in Missouri, this story has three active threads to follow simultaneously:
1. The ballot timing decision — today. Kehoe's choice between August and November affects how much time businesses have to understand and prepare for what a "yes" vote would mean for their tax obligations.
2. The lawsuit. If the Cole County court grants an injunction, the amendment could be pulled from the ballot entirely — at least temporarily. A ruling could come quickly given the deadline pressure.
3. The policy itself. The amendment gives a five-year window to expand sales taxes to make up for lost income tax revenue. Lawmakers would have to change policies to both lower the income tax and raise other taxes to make up for that loss. Service businesses currently exempt from Missouri sales tax — law firms, accounting practices, medical offices, real estate services, consultants — are all potentially in scope. The amendment doesn't tax any of them automatically, but it gives the legislature the authority to do so without returning to voters. Mass.gov
The five-year window starts the moment voters approve the amendment. The legislative pressure to act begins immediately after.
Missouri is ground zero for the biggest sales tax debate in the country right now. Whatever happens today — and in court — will set the trajectory for one of the most consequential tax votes any state has held in decades.
If you operate a business in Missouri — especially a service business currently exempt from sales tax — now is the time to understand what this proposal could mean for your compliance obligations. Book a free consultation with our team at sales.tax. We'll walk through your exposure and help you prepare for whatever the ballot brings.