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Missouri Considers Sales Tax Increase


 Missouri Governor Says Kleenex Will Cost More Under SB 26.

The Missouri Senate has approved legislation that would reduce individual and corporate income taxes by 0.75 percent and raise the state sales tax by 0.5 percent. Many Republican lawmakers support SB 26. Governor Jay Nixon (D) is against it.

Both the reduction in income taxes and the increase in sales tax would be staggered over a period of five years. Missouri currently has a state sales tax rate of 4%. If the legislation is approved, the rate would rise a tenth of a percent annually, beginning in 2014. By 2018, the rate would cap at 4.5%.

Senator Will Kraus (R-Lee's Summit), who sponsored the bill, called the measure "pro-growth" and "pro-jobs." He said it "will allow us to put money back into taxpayers' hands so they can go out and spend it and create more jobs."

The governor disagrees. In a letter presented to Missouri state senators on March 11, Gov. Nixon explains his "strong opposition to [the bill's] inclusion of a large sales tax increase that would fall on all Missourians and disproportionately impact seniors and veterans." He detailed two objections to the bill:

  • The cost of most everything all Missourians buy, "from clothing to Kleenex," would increase;
  • The tax burden would shift "away from corporations and the most affluent onto those who can least afford these added costs."

Eleven lawmakers may have been swayed by the governor's letter, but 23 senators voted in favor of SB 26 on March 12.

SB 26 now moves to the House.

Missouri is not the only state considering changing their tax systems in order to encourage growth.

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photo credit: Robert S. Donovan via photopin cc


Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.