Missouri Legislature Ends Session, Sending Income Tax Elimination and Speed Limit Hike to Governor

JEFFERSON CITY, Mo. — The Missouri General Assembly concluded its 2026 legislative session on Friday, May 15, after passing 100 bills, the highest total since 2019. Among the most significant pieces of legislation sent to the governor's desk are a proposal to let voters decide on phasing out the state's income tax and a separate bill to increase the speed limit on rural interstates. Lawmakers approved a joint resolution that, if signed by the governor, will place a constitutional amendment on a future ballot. This amendment would authorize the state legislature to begin the process of completely eliminating Missouri’s personal and corporate income taxes. The governor will have the authority to decide when the question appears before voters. The proposal outlines a mechanism to offset the substantial loss of revenue from income taxes. It would grant the legislature new power to expand the state’s sales tax base, applying it to goods and services that are not currently taxed. According to an analysis from the Show-Me Institute, this is a crucial change, as the state constitution currently prohibits the legislature from expanding the sales tax to anything that was not taxed as of 2015. For Missouri businesses, the prospect of eliminating the state income tax is a double-edged sword. While a zero-income-tax environment is appealing, the proposed shift to a broader sales tax creates significant uncertainty. This isn't a simple tax cut; it's a fundamental restructuring of how the state generates revenue. Businesses, particularly in the service sector which may face new tax obligations, will need to analyze how a consumption-based model affects their pricing, supply chains, and compliance burdens. The legislation includes a critical guardrail: any expansion of the sales tax base or increase in the rate must be revenue-neutral. All additional revenue generated from sales tax changes must be used exclusively to lower the state income tax, theoretically preventing a net tax increase while facilitating the phase-out. This structure is designed to speed up the process of eliminating the income tax by giving lawmakers a direct tool for revenue replacement. In a separate but also closely watched development, the legislature passed Senate Bill 1408. The bill increases the maximum speed limit on rural interstates and freeways from 70 to 75 miles per hour. The measure also includes a significant change for vehicle owners by eliminating the requirement for annual safety inspections for most passenger cars and trucks. Inspections would still be required for prior salvage vehicles after the rebuilding process and certain other specific cases. The move to raise speed limits has drawn sharp criticism from safety organizations. Advocates for Highway and Auto Safety sent a letter to Senate leaders in February 2026 urging them to oppose the bill, citing data linking higher speeds to increased fatalities. According to the organization, which referenced National Highway Traffic Safety Administration data, Missouri saw an estimated 965 traffic fatalities in 2024, an 11% increase since 2015. Furthermore, speeding was a contributing factor in 37% of the state’s traffic fatalities in 2023, placing Missouri among the ten highest states for that metric. The flurry of legislative activity this session underscores the need for constant vigilance. When the entire tax code is up for debate, it creates both opportunities and risks. In our experience, companies that proactively model these scenarios are best positioned to adapt. We advise clients that the time to prepare is now, not after a ballot measure passes. As specialists in tax preparation and compliance, C&S Finance Group LLC helps businesses navigate precisely these kinds of complex regulatory shifts to ensure they are not caught flat-footed by a new tax reality. Business owners can learn more at csfinancegroup.com. The passage of 100 bills marks a sharp increase in legislative output compared to recent years, including the 81 bills passed in the previous session. The wide-ranging legislation touches on numerous aspects of the state's economy and regulatory environment, setting the stage for potentially significant changes for businesses and residents alike. With the session now adjourned, the focus shifts to Governor Mike Parson, who will review the 100 bills and decide which to sign into law, veto, or allow to become law without his signature. For the income tax proposal, his signature would trigger the next step of placing the constitutional amendment on an upcoming statewide ballot for Missouri voters to decide.