HJR 25 Summary

• Repeals Missouri's state income tax effective January 1, 2017, with a transition period capping the rate at 3% for tax years 2015-2016.

• Replaces income tax revenue with a new state sales tax of up to 5% on most goods and services (4% on food) effective January 1, 2015, increasing to a combined 7% maximum (5.5% on food) after January 1, 2017 when combined with existing taxes.

• Prohibits new individual income taxes by counties and cities, except those lawfully enacted before January 1, 2014 that continue voter approval.

• Creates extensive exemptions from the new sales tax including professional services, real property, utilities, pharmaceuticals, education, agricultural products, manufacturing equipment, financial instruments, and insurance.

• Requires the state to maintain school district funding at the average annual revenue level received in fiscal years 2009-2013 from the new sales tax, and mandates a property tax relief credit for seniors and disabled individuals earning $75,000 or less with homes valued under $400,000.