HJR 174: Constitutional Amendment on Taxation
Sponsor: Rep. Jon Patterson
Oppose
Structural threat to taxpayer rights
HJR 174 is marketed as "income tax elimination," but it creates a constitutional mechanism to authorize broad sales-tax expansion (including services) while undercutting Hancock taxpayer protections. It forces local governments to offset revenues and grants the Department of Revenue sweeping "notwithstanding" powers.
What Does This Bill Do?
- Conditional Income Tax Lock: Creates a constitutional ban on state individual income tax if future legislatures trigger it by reducing the rate below 1.4% (no earlier than 2031).
- Sales Tax "Blank Check": Authorizes the expansion of sales/use taxes to "any goods and services" if the legislature claims it is "for the purpose" of reducing income tax.
- Bypasses Hancock Guardrails: Explicitly exempts key implementing legislation from Hancock Amendment voter-approval requirements (Art. X, §§18 and 18(e)) if enacted within a 3-year window.
- Forced Local Offsets: Mandates that local governments adjust their tax rates annually to "offset" revenue from the broader base, creating instability and vague compliance standards.
Constitutional or Critical Context
HJR 174 proposes a "bait-and-switch" on Missouri taxpayers. By offering the promise of income tax elimination, it secures a constitutional permission slip to tax services (childcare, funerals, legal services, etc.). Most dangerously, it attempts to suspend the Hancock Amendment's voter approval requirement (Section 18e) during the implementation phase, removing the people's check on tax hikes.
Red Flags & Detailed Concerns
CRITICAL: Hancock Guardrails Bypassed
The bill explicitly attempts to exempt implementing legislation from Article X §§18 and 18(e). This is a major red flag because it allows tax increases without the voter approval normally required by the Constitution.
CRITICAL: The "For the Purpose" Loophole
Article X, §26(2) allows the legislature to tax ANY service if they simply claim it is "for the purpose" of income tax reduction. This "exception swallows the rule" and creates a blank check for base expansion.
SERIOUS: Sweeping Agency Power
It grants the Department of Revenue director the power to regulate "notwithstanding any provision of this Constitution to the contrary," inviting administrative overreach and reducing legislative accountability.
Entity Tax Workaround
The "ban" only applies to individual income tax. It explicitly carves out trusts, estates, and entities, allowing politicians to shift the income tax burden to businesses and pass-throughs.
Act for Missouri Recommendation:
Act for Missouri OPPOSES HJR 174. While the goal of income tax elimination is laudable, the mechanism here creates loopholes, empowers the executive branch, and removes critical Hancock protections when they are needed most.