AIM opposes current draft of tax reform bill, HCS HJRs 173 & 174

March 9, 2026 - In a legislative alert sent to all elected members of the Missouri House of Representatives today, the Voice of Missouri Business® stood up for all Missouri businesses in opposing the current draft of the tax reform resolution. The text of the legislative alert is repeated in this article:

"Associated Industries of Missouri must oppose the tax reform proposal as currently drafted but will continue to negotiate with proponents in an attempt to find language that protects the business community and, if agreement is found, may remove our opposition or support the measure in the future. We look forward to working with all parties to find a compromise that allows this measure to move forward and bring additional economic development to Missouri."

Some suggestions that would improve the proposal from a business perspective include:

1. Allow pass-through entities such as S Corps, LLCs, LLPs, partnerships, sole proprietors, etc., to enjoy the income tax reduction and elimination;

2. Do not apply sales/use taxes to inputs of any business producing goods and services that are subject to sales/use taxes;

3. Besides expanding the tax to digital transactions and services, protect the specific sales tax exemptions in current law, particularly those that would result in double taxation if they were eliminated;

4. Prohibit new gross receipts and other new types of taxes (taxes on profits, hybrid gross receipts/income taxes on businesses, etc.);

5. Cap the corporation income tax rate at the current rate of 4%; and,

6. Suggest proponents consider stating a maximum sales/use tax rate increase in the proposal because businesses, as well as individual consumers, pay sales and use taxes.

Associated Industries of Missouri looks forward to working with proponents to resolve these issues in a way that will allow the business community to support the proposal.

MISSOURI IS VERY COMPETITIVE WITH STATES WITHOUT INDIVIDUAL INCOME TAX

When compared to states that currently have no individual income tax, Missouri is very competitive.

Missouri ranked second in attracting or creating businesses between 2024 and 2025. Missouri gained 10,612 businesses, while all other no-income-tax states except Washington gained fewer or lost businesses. Tennessee lost 9,660 businesses and Florida lost 18,792 businesses during this time frame.

Missouri’s corporation income tax rate of 4% is lower than any of the no-income-tax states that have a corporation income tax.

Missouri businesses pay a lower percentage of total state and local income tax than any of the no-income-tax states.

Missouri has a lower cost of living than any of the no-income-tax states.

Missouri is competitive in real GDP among the no-income-tax states ranking slightly behind Tennessee and better than Texas.

Missouri businesses are very concerned about this proposal, and we look forward to working with proponents to craft a proposal that may receive our endorsement in the future. We will keep our member businesses posted of developments regarding this bill.