Report: Kehoe to ask voters to phase out income tax in 2026

Missouri Gov. Mike Kehoe is preparing to ask voters to start phasing out the state's income tax in 2026, according to a Nov. 11 report by the St. Louis Post-Dispatch.

The governor reportedly told the Post-Dispatch that he intends to unveil an income tax phase-out plan as lawmakers begin prefiling legislation next month for the legislative session in January. 

"Missourians will have to decide if they think it is right for them and their families," Kehoe reportedly said. "All we want to do is give people a chance to take a look at that."

Gabby Picard, communications director for Kehoe's office, said in an email to Springfield Business Journal shortly after the governor’s comments were reported yesterday that an income tax phase-out plan has not yet been released.

"Gov. Kehoe has talked about his intention to formulate a plan to responsibly eliminate state income tax before he was governor, as well as in his January 2025 State of the State," Picard said. "I would anticipate more details on this plan soon."

While Kehoe did not offer specifics about the plan, according to the Post-Dispatch, he said the $10 billion that is generated by Missouri's 4.7% income tax rate would need to be offset. He reportedly said income tax currently makes up roughly 63% of the state's general revenue.

“We’re looking at what other revenue streams we can use that make sense, that is not burdensome on Missourians, but ends up putting more money in their pocket by letting them keep their income tax,” Kehoe reportedly said. “When we do, it will make sense to everybody."

Kehoe also discussed tax policy in a recent interview with Springfield Business Journal. He said tax policy would be top of mind as the next legislative session begins. 

"Many states have eliminated their state income tax, and there’s a couple of models out there that we’ll be looking at to see if we can work with local legislators like Curtis Trent, the senator in this area has been really active in tax policy," Kehoe told SBJ. "I think that’s a big piece for economic development."

Kehoe added, "Our general revenue, which is about a third of our budget typically, continues to show a nice progress to zero income tax, etc."

Kehoe this summer signed House Bill 594, which makes Missouri the first in the nation to enact a tax cut that exempts capital gains from income taxes, according to past reporting.