The proposed bill, known as the "Fair Tax Act of 2026," seeks to amend chapter 144 of Missouri law by introducing a new section that eliminates all income taxes, including individual and corporate income taxes, as well as the estate tax, starting from January 1, 2028. In place of these taxes, the bill establishes a sales tax of five and eleven one-hundredths percent on the use or consumption of taxable property and services. The General Assembly is granted the authority to make one adjustment to the tax rate if the revenue generated from the sales tax does not match the revenue lost from the elimination of income taxes. Additionally, the bill outlines specific taxes that will be replaced and mandates the Department of Revenue to provide a monthly sales tax rebate to qualified families based on poverty guidelines. The bill includes a referendum clause, requiring voter approval at an election scheduled for November 2026. If approved by a majority of voters, the changes will take effect, fundamentally altering the state's tax structure by shifting from income-based taxation to a consumption-based sales tax system. The official summary for the ballot will inform voters about the elimination of income and estate taxes and the introduction of the new sales tax, along with the provision for monthly rebates to families.

Statutes affected:
Introduced (5006H.01): 144.001