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HB 2595

Authorizes a transient guest tax for tourism purposes upon voter approval in cities of the third classification operating under the city manager form of government

2026 Regular Session Introduced by Peggy McGaugh

Missouri HB 2595 lets qualifying third-class city manager municipalities impose a transient guest tax, only with voter approval, dedicated to tourism, with local oversight.

Referred: Emerging Issues(H)
#cities #towns #andvillages #motelsandhotels #taxationandrevenue-salesanduse #tourism
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Bill Summary · HB 2595

Bill Overview

HB 2595, Session 2026 (Missouri): Authorizes a transient guest tax for tourism purposes upon voter approval in cities of the third classification operating under the city manager form of government. The bill has co-sponsors, including Peggy McGaugh, and progressed through committee and floor consideration steps in the 2026 session.

Purpose and Intent

  • The primary goal is to create a mechanism for third-class cities that use a city manager form of government to adopt a transient guest tax (TGT) targeted for tourism-related purposes.
  • The proposal requires voter approval before the tax can be imposed, emphasizing local control and democratic authorizing processes.

Key Provisions and Changes

  • Authorization of Transient Guest Tax:
    • The bill allows qualifying third-class cities (those with a city manager form of government) to levy a transient guest tax.
    • The tax would be imposed only after the electorate of the city approves it through a local vote.
  • Tax Use and Deployment:
    • Revenue collected from the transient guest tax must be dedicated to tourism-related purposes within the municipality. (Exact allocation details may specify uses such as tourism promotion, convention facilities, or related tourism infrastructure, depending on the bill’s text.)
  • Local Government Form and Eligibility:
    • Applies specifically to cities of the third classification operating under the city manager form of government.
    • The bill does not appear to extend TGT authority to other city classifications or governance structures without additional changes.
  • Ballot and Approval Process:
    • The tax can be enacted only following a successful local election where voters in the city authorize the tax.
    • The bill likely sets criteria for ballot wording, duration, and potential renewal or sunset provisions, though exact language would need to be reviewed in the bill text.
  • Oversight and Administration:
    • Governing body oversight is expected, potentially involving city departments (e.g., finance or revenue), with provisions for collecting, reporting, and auditing revenue and expenditures related to tourism.

Who Would Be Affected

  • Residents and visitors in qualifying Missouri third-class cities with a city manager form of government.
  • City finances and tourism-related entities within those municipalities, including tourism promotion agencies, convention and visitor bureaus, hotels, and local tourism-driven businesses.
  • Local government administration responsible for revenue collection, allocation, reporting, and oversight of the tax.

Procedural and Timeline Aspects

  • Prefiled: December 29, 2025
  • First Reading: January 7, 2026
  • Second Reading: January 8, 2026
  • Referred to Committee: Emerging Issues (H) on May 15, 2026
  • Next steps would typically include committee hearings, potential amendments, and floor votes in the House, followed by consideration in the Senate and final enactment, subject to standard legislative timelines.

Potential Impacts and Considerations

  • Economic Impact: If enacted, municipalities could gain a dedicated revenue stream to fund tourism development and promotion, potentially boosting local economies and visitor spending.
  • Local Autonomy: The requirement for voter approval reinforces local control and consent.
  • Fiscal Implications: Tax rate, maximums, exemptions, and duration (sunset or renewal) are critical details that will determine revenue levels and long-term planning for cities adopting the tax.
  • Equity and Tourism Management: Cities will need to ensure transparent reporting on how funds are spent and measure the impact on tourism and community services.

Note: For a complete understanding of scale, rate, exemptions, sunset provisions, and specific allowable uses, the full text of HB 2595 and any amended versions should be consulted.

Compiled from official sources — confirm details with the bill’s official record.

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