State Bill of the Month – January 2026: Missouri HJR 174

Introduced by Missouri Speaker Jonathan Patterson (R-30), HJR 174 would propose a constitutional amendment to phase out the income tax. This amendment is contingent upon the will of the voters in Missouri, and if all revenue triggers established by law reduce the top individual income tax rate to below 1.4 percent. TPA recognizes that the resolution authorizes sales taxes to be ‘expanded by legislation.’ When that legislation is introduced, TPA will stand against it. It is critical that the income tax phaseout goes hand-in-hand with spending cuts, not tax hikes.

Phasing out the Missouri state income tax would make Missouri a more attractive place for individuals and to create and retain big and small businesses. States without income taxes consistently rank higher in measures of inbound migration, job growth, and business formation. Phasing out the income tax sends a clear signal that the state tax structure does not penalize work, savings, or investment and that the state welcomes economic activity and long-term commitment.

The income tax, which imposes an onerous top rate of 4.7 percent on taxable income over $9,191, results in significant administrative and compliance costs foisted on taxpayers and the state alike. Individuals and small businesses must devote time and resources to filing, recordkeeping, and using professional assistance, while the state must maintain complex enforcement and collection systems. Repeal would end this onerous system, allowing families and businesses to redirect resources toward more productive uses.

Missouri has already made critical strides in reforming its tax code. The top income tax rate has been lowered to 4.7 percent from 6 percent, and the state now allows individuals to deduct 100 percent of federal capital-gains taxes. These changes are laudable, but Missouri can do far more to give families a well-deserved break and bring businesses and opportunities into the state. Repeal would provide broad-based relief, particularly to middle- and lower-income households who feel the impact of income taxes most acutely. Allowing residents to keep more of what they earn supports family savings, consumer spending, and overall economic resilience.

HJR 174 is an essential step towards reducing the tax burden on taxpayers in Missouri. While Missouri has taken steps to gradually reduce its income tax percentage over the years, a full phaseout of the income tax would be a boon to the economy of the Show Me State.

It is for these reasons, among others, that TPA is pleased to make HJR 174, as introduced by Missouri Speaker Jonathan Patterson, its Bill of the Month for January 2026.