SS#2/SCS/SJR 29 - Upon voter approval, this proposed constitutional amendment repeals the corporate income, corporate franchise, and bank franchise, and state sales and use taxes effective January 1, 2013. For each tax year beginning January 1, 2013, the tax rates for the state individual income tax will be reduced by twenty percent from the previous year's rate until all such rates are zero. Effective January 1, 2018, state taxes upon income will be prohibited. Beginning July 1, 2013, a new state tax on taxable purchases and services will be imposed at a rate not to exceed seven percent. The general assembly must provide for annual rate adjustments to ensure revenue neutrality during the phase out of the individual income tax.
Component parts or ingredients of a new tangible personal property to be sold at retail, intangible property, previously taxed property, motor fuel, insurance premiums and fees paid on insurance products, donations to and purchases by charitable organizations, federal government purchases, tuition paid for educational services, and business-to-business transactions including agriculture will be exempt from the new tax while all other exemptions and tax credits will be eliminated. The enactment of any new exemptions will require a two-thirds affirmative vote by the General Assembly and approval by the Governor. The conservation sales tax, the soil and parks sales tax, and local sales taxes will be recalculated to produce substantially the same amount of revenue. The General Assembly must provide a method to calculate and provide sales tax rebates or prebates to exempt a portion of taxable purchases made by Missouri residents.