Bill > HB821

This bill proposes to replace Missouri's current tax system with a new "Fair Tax Act of 2025" that would eliminate individual and corporate income taxes, corporation and bank franchise taxes, and the estate tax, starting in tax year 2028. Instead, the state would implement a new sales tax of 5.11% on all new retail purchases and services. To help offset the potential financial burden on lower-income families, the bill mandates that the Department of Revenue create a monthly sales tax rebate for qualified families, calculated based on the federal poverty guidelines. The amount of this rebate would be determined annually and distributed at the beginning of each month. The proposed changes would be subject to voter approval in the November 2026 election, and the ballot language will ask voters whether they support eliminating income and estate taxes in favor of a revenue-neutral sales tax with a family rebate mechanism. If approved, the new tax system would aim to replace lost income tax revenue with the new sales tax while providing some economic relief to families through the monthly rebate.

https://house.mo.gov/Bill.aspx?bill=HB821&year=2025&code=R