HB 3026 would authorize Missouri counties, by local order or ordinance and with voter approval, to replace county real property and personal property taxes with an earnings tax. The bill defines “earnings tax” broadly to include taxes on wages, salaries, commissions, and net profits earned by residents and nonresidents for work or business activity connected to the county. It also specifies how taxable earnings are calculated, including treatment of deferred compensation, and allows counties to establish formulas, deductions, exemptions, and wage brackets to administer the tax.
The proposal sets out a local election process before any county could adopt the replacement tax. A county governing body would have to submit the question to voters, and the earnings tax could only take effect if approved by a majority. The ballot language would ask whether the county should replace all county real and personal property taxes with an earnings tax designed to produce substantially the same revenue. The bill also authorizes counties to require employers to collect and remit the tax, allows a retention fee of 1.5% for employers unless changed by ordinance, and prohibits counties from requiring taxpayers to file copies of state or federal income tax returns as part of administration.
If enacted, the bill would add three new sections to Chapter 50, RSMo, creating a county-level earnings tax framework in Missouri law. It would affect county taxing authority, employers responsible for withholding and remitting the tax, and taxpayers whose wages or business income would be subject to the new levy. The bill also includes extensive exemptions for certain nonprofit, mutual, religious, charitable, educational, civic, agricultural, and retirement-related entities, as well as exclusions for certain types of income such as life insurance proceeds, workers’ compensation, gifts, and government bond interest.
The available context suggests the bill did not advance to enactment and was ultimately withdrawn. Because there are no committee transcripts or recorded votes, there is little direct evidence of public debate in the provided materials. The overall sentiment appears neutral to procedural rather than strongly documented in the record, with the bill framed as a local-option tax reform measure rather than a statewide mandate.
The main point of contention inherent in the bill is the replacement of property taxes with an earnings tax, which would shift the county revenue base from ownership of property to income and business activity. That change could raise concerns among property owners, employers, and taxpayers about tax burden, administration, and economic effects, while supporters would likely view it as a way to give counties a voter-approved alternative revenue source. The bill’s detailed exemptions and employer collection provisions suggest an effort to limit administrative disruption and protect certain nonprofit and retirement-related income streams.
HB 3026 would amend Chapter 50, RSMo, by adding new sections that authorize counties to levy an earnings tax in place of county real and personal property taxes, subject to voter approval. It would create new county taxing authority, establish definitions, exemptions, collection rules, employer compensation for withholding, and administrative limits, thereby changing how counties could raise revenue and how employers and taxpayers would comply with local tax law.
The provided record shows no committee discussion or vote history, and the bill was later withdrawn. As a result, there is no documented floor or committee sentiment to assess directly. Based on the bill text alone, it appears to have been presented as a local-option fiscal policy proposal, with no recorded public debate in the materials provided.
The central controversy is the policy shift from property taxes to an earnings tax, which would alter who bears the county tax burden and how revenue is collected. Potential opponents would likely include property owners and employers concerned about a new payroll-based tax and administrative obligations, while supporters would likely favor giving counties flexibility to replace property taxes with a voter-approved earnings tax. The bill’s broad exemption structure and employer collection fee indicate attempts to address administrative and equity concerns, but those same features could also be points of debate over complexity and revenue adequacy.