Modifies provisions relating to taxation

EXPLANATION-Matter enclosed in bold-faced brackets [thus] in this bill is not enacted
and is intended to be omitted in the law.
SECOND REGULAR SESSION
SENATE JOINT RESOLUTION NO. 101
103RD GENERAL ASSEMBLY
INTRODUCED BY SENATOR MOON.
5137S.01I KRISTINA MARTIN, Secretary
JOINT RESOLUTION
Submitting to the qualified voters of Missouri, an amendment repealing sections 1 and 6(a) of
article X of the Constitution of Missouri, and adopting eleven new sections in lieu
thereof relating to taxation.
Be it resolved by the Senate, the House of Representatives concurring therein:
That at the next general election to be held in the 1
state of Missouri, on Tuesday next following the first Monday 2
in November, 2026, or at a special election to be called by 3
the governor for that purpose, there is hereby submitted to 4
the qualified voters of this state, for adoption or 5
rejection, the following amendment to article X of the 6
Constitution of the state of Missouri:7
Section A. Sections 1 and 6(a), article X, Constitution 1
of Missouri, are repealed and eleven new sections adopted in 2
lieu thereof, to be known as sections 1(a), 1(b), 1(c), 1(d), 3
1(e), 1(f), 1(g), 1(h), 1(i), 1(j), and 6(a), to read as 4
follows:5
Section 1(a). The provisions of sections 1(a) to 1(j) 1
and section 6(a) of this article shall be known and may be 2
cited as the "Ed Emery Act". The taxing power may be 3
exercised by the general assembly for state purposes, and by 4
counties and other political subdivisions under power 5
granted to them by the general assembly for county, 6
municipal, and other corporate purposes, except the general 7
assembly shall not have the power to enact any law: 8
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(1) Imposing a tax on or measured by the income or 9
earnings of an individual for tax years beginning on or 10
after January 1, 2031; or 11
(2) Authorizing any county or other political 12
subdivision to enact, levy, or impose a tax on or measured 13
by the income or earnings of an individual, except any tax 14
on or measured by the income or earnings of an individual 15
that was lawfully enacted and imposed by a city prior to 16
January 1, 2028, and continues to be lawfully renewed by 17
voters of such city; or 18
(3) Imposing a tax for state purposes on sales or 19
services other than as authorized in sections 1(a) to 1(j) 20
of this article or exempted from repeal in section 1(d) of 21
this article. 22
Section 1(b). For tax years beginning on or after 1
January 1, 2029, the following laws are repealed: 2
(1) Any law enacted by the general assembly that 3
imposes a tax for state purposes that is on or measured by 4
the income or earnings of an individual, except as provided 5
in section 1(c) of this article; and 6
(2) Any law enacted by the general assembly that 7
authorizes any county or other political subdivision to 8
impose a tax for county, municipal, and other corporate 9
purposes that is on or measured by the income or earnings of 10
an individual, except any law imposing a tax on or measured 11
by the income or earnings of an individual that was lawfully 12
enacted and imposed by a city prior to January 1, 2028, and 13
continues to be lawfully renewed by voters of such city. 14
Section 1(c). 1. For tax years beginning on or after 1
January 1, 2029, any law enacted by the general assembly 2
that imposes a tax for state purposes that is on or measured 3
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by the income or earnings of an individual shall not be more 4
than three percent. 5
2. For tax years beginning on or after January 1, 6
2031, any law enacted by the general assembly that imposes a 7
tax for state purposes that is on or measured by the income 8
or earnings of an individual shall be repealed. 9
3. The general assembly shall enact a law with an 10
effective date no later than January 1, 2031, to provide a 11
mechanism for the continuation of any property tax relief 12
available for senior citizens and disabled individuals in 13
the tax year beginning January 1, 2027, and which was, for 14
that tax year, provided in the form of an income tax credit. 15
Section 1(d). For tax years beginning on or after 1
January 1, 2029, all laws enacted by the general assembly 2
for state purposes prior to the effective date of this 3
section imposing sales and use taxes and exemptions thereto 4
are repealed, except taxes on alcohol, aviation fuel, 5
insurance products, tobacco, any taxes imposed by article 6
IV, sections 43(a) and 47(a), or any taxes provided for by 7
article IV, section 30(a), and exemptions thereto. 8
Section 1(e). 1. The general assembly shall enact a 1
law, effective January 1, 2029, imposing and levying a tax 2
on all sales and services, except those sales and services 3
exempted pursuant to section 1(f) of this article, at a rate 4
that shall not exceed five percent prior to January 1, 2031, 5
except for the rate of tax imposed on food which shall not 6
exceed four percent prior to January 1, 2031. On and after 7
January 1, 2031, the sum of the rate of such tax on sales 8
and services other than food plus the rates of the taxes 9
calculated in section 1(h) of this article shall not exceed 10
seven percent, and the rate of tax on the sale of food plus 11
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the rates of the taxes calculated in section 1(h) of this 12
article shall not exceed five and one-half percent. 13
2. All revenues collected from the tax imposed 14
pursuant to this section shall be deposited into the general 15
revenue fund of the state of Missouri and be subject to 16
appropriation by the general assembly, unless otherwise 17
restricted or appropriated by this constitution, except a 18
portion of the revenues collected from the tax imposed 19
pursuant to this section shall be deposited into the school 20
district trust fund or any successor fund, to be distributed 21
to the school districts of the state as provided by law, so 22
that such fund receives no less than the amount of revenue 23
as such fund received on average annually in fiscal years 24
2023-2027. 25
3. In the event of an emergency, the general assembly 26
may increase taxes, licenses, or fees as prescribed in 27
section 18(e)3 of this article. 28
Section 1(f). The following shall not be subject to 1
any tax imposed pursuant to section 1(e) of this article: 2
(1) Those sales and services subject to taxes which 3
are specifically exempted from the repeal in section 1(d) of 4
this article; 5
(2) Sales of personal property for which the tax 6
authorized pursuant to section 1(e) of this article or a 7
sales or use tax repealed by section 1(d) of this article 8
has been collected due to a prior taxable transaction or 9
sales for resale; 10
(3) Professional services; 11
(4) Sales, leases, or rents of real property including 12
all fees, charges, or commissions resulting directly or 13
indirectly from the sale, lease, or rent of the real 14
property; 15
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(5) Sales of metered or unmetered water or wastewater 16
service, electric energy or capacity, electric service, 17
natural, artificial or propane gas, wood, coal, or heating 18
oil; 19
(6) Sales of pharmaceuticals or medical services by a 20
licensed health care professional for the direct benefit of 21
any individual's health care, where such sales or services 22
are not subject to being recouped from another source; 23
(7) Child care services and services provided for by a 24
residential care, assisted living, intermediate care, or 25
skilled nursing facility; 26
(8) Tuition and fees of any early childhood, 27
prekindergarten, kindergarten, elementary, secondary, 28
vocational or technical school, or an accredited institution 29
of higher education for educational services; 30
(9) Services rendered by an employee for his or her 31
employer; 32
(10) Services between entities that in the given year 33
consolidate earnings; 34
(11) Sales or services directly used for agricultural 35
trade or agricultural business purposes; 36
(12) Sales of materials, fuel, manufactured goods, 37
machinery, equipment, parts, or replacement parts used or 38
consumed in manufacturing, processing, compounding, mining, 39
producing, fabricating, researching, or developing a product 40
or producing a service, or controlling pollution, or that 41
become a component part or ingredient of a product or 42
service; 43
(13) Construction, warehousing, computer system, 44
software design, employment, call center, and payroll 45
processing services; 46
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(14) Sales of stocks, bonds, financial instruments, 47
and other similar intangible personal property; 48
(15) Sales of bullion or coins, artistic works, 49
precious stones, or other tangible personal property held 50
exclusively for investment purposes; 51
(16) Sales of insurance products and insurance 52
services; 53
(17) Sales of railroad rolling stock for use in 54
transporting persons or property in interstate commerce and 55
motor vehicles licensed for a gross weight of twenty-four 56
thousand pounds or more or trailers used by common carriers 57
in the transportation of persons or property; 58
(18) Sales of barges which are to be used primarily in 59
the transportation of property or cargo on interstate 60
waterways; 61
(19) The purchase or storage of tangible personal 62
property by any common carrier engaged in the interstate air 63
transportation of persons and cargo; 64
(20) Gaming sales, services, wagers, winnings, or 65
admission fees related to licensed bingo, racing, or 66
excursion gambling boat activities; 67
(21) Sales or services to or for the benefit of the 68
United States of America, any state, county, other political 69
subdivision, foreign government, or a charitable 70
organization exempt from taxation under federal law, and the 71
sale or service is in furtherance of the purpose of the 72
state, county, or other political subdivision, or a 73
charitable organization; 74
(22) Sales made through the use of funds provided by 75
the Supplemental Nutrition Assistance Program or any 76
successor program; 77
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(23) Sales for which federal government coupons or 78
vouchers under the supplemental funding for women, infants, 79
and children program, or any successor program, are used as 80
payment; 81
(24) Sales exempted from state taxation under any 82
other federal program that requires a state that chooses to 83
participate in such a program to be exempt from tax; 84
(25) Nonproprietary sales made by or nonproprietary 85
services performed by the state, a county, or other 86
political subdivision; 87
(26) Sales which the state of Missouri is prohibited 88
from taxing pursuant to this constitution or the 89
Constitution or laws of the United States of America; and 90
(27) Any other sale or service exempted by a two- 91
thirds vote of the members elected to each house of the 92
general assembly, proceeded upon in the same manner as in 93
the case of a bill and presented to the governor. 94
Section 1(g). 1. "Cumulative sales tax rate" as used 1
in section 1(i) of this article shall mean the rate of the 2
state sales tax, levied and imposed under section 1(e), plus 3
the rate of the taxes imposed by article IV, sections 43(a) 4
and 47(a), as calculated in section 1(h), plus the rate of 5
sales and use taxes, as calculated in section 1(i) of this 6
article, or newly imposed sales and use taxes, imposed by 7
counties, other political subdivisions, and other taxing 8
jurisdictions, but excluding any taxes imposed by 9
transportation development districts or community 10
improvement districts. 11
2. "Professional services" as used in sections 1(a) 12
through 1(j) of this article shall mean services rendered by 13
an accountant, architect, barber, cosmetologist, embalmer, 14
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engineer, funeral director, lawyer, real estate agent, real 15
estate broker, or real estate appraiser. 16
3. "Sales" as used in sections 1(a) to 1(j) of this 17
article shall mean any transfer, rental, lease, exchange, or 18
barter, conditional, or otherwise, in any manner or by any 19
means whatsoever, of tangible property, not purchased for 20
resale or leasing, for consideration. "Sales" shall also 21
include the privilege of storing, using, or consuming within 22
this state any article of tangible property on or after 23
January 1, 2029. 24
4. "Services" as used in sections 1(a) to 1(j) of this 25
article shall mean all activities for the benefit, use or 26
consumption, regardless if paid by a fee, retainer, 27
commission, or other consideration, when such activities 28
involve predominantly the performance of a service as 29
distinguished from the sale of property. 30
Section 1(h). Notwithstanding the provisions of 1
sections 43(a) and 47(a) of article IV of this constitution 2
to the contrary, effective January 1, 2029, the tax levied 3
and imposed pursuant to those sections shall be imposed on 4
the same tax base as the tax authorized under section 1(e) 5
of this article. The rates of tax levied and imposed 6
pursuant to sections 43(a) and 47(a) of article IV of the 7
constitution shall be recalculated, no later than May 1, 8
2028, and adjusted to produce an amount of revenue for the 9
2029 fiscal year substantially equal to the amount received 10
on average annually in fiscal years 2023-2027, however, on 11
and after January 1, 2031, the sum of such rates plus the 12
rate of the tax authorized in section 1(e) of this article 13
shall not exceed seven percent. The general assembly shall 14
provide for the procedure by which such tax rates shall be 15
recalculated and the rate of tax may be readjusted in the 16
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same manner one time after January 1, 2029, and before 17
January 1, 2032, to provide an amount of revenue for each 18
fiscal year substantially equal to the amount received on 19
average annually in fiscal years 2023-2027. 20
Section 1(i). 1. Effective January 1, 2029, all 1
provisions of laws, ordinances, or resolutions exempting 2
sales and services other than the sales and services 3
exempted pursuant to sections 1(a) to 1(j) and section 25 of 4
this article from taxation by counties, other political 5
subdivisions, or other taxing jurisdictions, as well as all 6
provisions establishing the rate of the tax on such sales 7
and services, except those exemptions or exclusions 8
expressly approved by local voters and in effect as of 9
January 1, 2027, shall be void. 10
2. A new rate shall be imposed by the counties, other 11
political subdivisions, and other taxing jurisdictions on 12
sales and services necessary to produce an amount of revenue 13
substantially equal to the amount that was produced by the 14
prior rate of the tax on average in the five years prior to 15
January 1, 2029. 16
3. The department of revenue shall calculate the new 17
rate under a process the general assembly shall establish by 18
law, and shall provide the new rate to the counties, other 19
political subdivisions, and other taxing jurisdictions no 20
later than September 1, 2028. The general assembly shall 21
include a process for allowing taxpayers, counties, other 22
political subdivisions, and other taxing jurisdictions, to 23
appeal the recalculation in this section, provided that such 24
appeal be filed by January 1, 2031. The department of 25
revenue may recalculate the new rate under the process 26
established by the general assembly one time after January 27
1, 2029, but before January 1, 2031. 28
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4. On or after January 1, 2031, the cumulative sales 29
tax rate shall only exceed ten percent, when either: 30
(1) The cumulative sales tax rate exceeds ten percent, 31
when the new rate established pursuant to subsection 3 of 32
section 1(i) of this article is effective, and such rate 33
shall be reduced to the extent that the county, other 34
political subdivision, or other taxing jurisdiction is no 35
longer authorized by law to impose, in whole or part, any 36
sales tax which was a component of the cumulative sales tax 37
rate at the time the new rate was established pursuant to 38
subsection 3 of section 1(i) of this article; or 39
(2) The qualified electors in the taxing jurisdiction 40
proposing a tax on sales and services, which tax will cause 41
the cumulative sales tax rate to exceed ten percent in any 42
part of the taxing jurisdiction, approve the new tax in the 43
same requisite percentages as approval of local government 44
debt in article VI, section 26(b) of this constitution. 45
Section 1(j). 1. The burden of proof for establishing 1
tax liability for any taxes imposed pursuant to section 1(e) 2
of this article shall be borne by the state in all legal 3
proceedings. 4
2. Taxpayers shall have the same rights to enforce the 5
provisions of this amendment as in section 23 of this 6
article. 7
Section 6(a). 1. The general assembly [may] shall 1
provide that a portion of the assessed valuation of real 2
property actually occupied by the owner or owners thereof as 3
a homestead, be [exempted from the payment of taxes thereon, 4
in such amounts and upon such conditions as may be 5
determined by law, and the general assembly may provide for 6
certain tax credits or rebates in lieu of or in addition to 7
such an exemption, but any such law shall further provide 8
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for restitution to the respective political subdivisions of 9
revenues lost, if any, by reason of the exemption, and any 10
such law may also provide for comparable financial relief to 11
persons who are not the owners of homesteads but who occupy 12
rental property as their homes] credited against current tax 13
liability in certain circumstances. If in the prior tax 14
year, the property tax liability on any parcel of subclass 15
(1) real property increased by more than five percent in a 16
year of general reassessment or two and one-half in a year 17
without general reassessment, then any eligible owner of the 18
property shall receive a property tax relief credit in the 19
amount of fifty percent of the increase above such 20
thresholds for such year against the current year's property 21
tax liability. Eligible owners must be sixty-five years or 22
older and have an income, including Social Security, of 23
seventy-five thousand dollars or less, adjusted annually 24
based on the general price level as defined in section 17(3) 25
of this article. Owners in homes with an appraised value in 26
excess of four hundred thousand dollars, adjusted annually 27
based on the general price level as defined in section 17(3) 28
of this article, are not eligible. The state shall 29
reimburse local governments for seventy-five percent of any 30
credit taken under this section. Any eligible owner who 31
receives a property tax relief credit pursuant to this 32
section shall not be eligible for any exemption, refund, 33
credit, or rebate pursuant to sections 1(c)(3) or 6(a)(2) of 34
this article. 35
2. In addition to the relief provided by subsection 1 36
of this section, the general assembly may provide that a 37
portion of the assessed valuation of real property actually 38
occupied by the owner or owners thereof as a homestead, be 39
exempted from the payment of taxes thereon, in such amounts 40
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and upon such conditions as may be determined by law, and 41
the general assembly may provide for certain tax credits or 42
rebates in lieu of or in addition to such an exemption, but 43
any such law shall further provide for restitution to the 44
respective political subdivisions of revenues lost, if any, 45
by reason of the exemption, and any such law may also 46
provide for comparable financial relief to persons who are 47
not the owners of homesteads but who occupy rental property 48
as their homes. 49
[Section 1. The taxing power may be 1
exercised by the general assembly for state 2
purposes, and by counties and other political 3
subdivisions under power granted to them by the 4
general assembly for county, municipal and other 5
corporate purposes.] 6
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