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HB 3503

Modifies the statutory provisions imposing a sales tax on food and authorizes a new business enterprise tax to offset lost revenue

2026 Regular Session Introduced by Wick Thomas

HB 3503 eliminates food sales tax for consumers while creating a new business enterprise tax to replace lost revenue, shifting tax burden from shoppers to businesses.

Referred: Emerging Issues(H)
#businessandcommerce #revenue #departmentof #taxationandrevenue-general #taxationandrevenue-income #taxationandrevenue-salesanduse
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Bill Summary · HB 3503

Legislative bill overview

HB 3503 removes or reduces the sales tax on food purchases while simultaneously establishing a new business enterprise tax to compensate for the lost tax revenue. The bill aims to lower the tax burden on groceries—typically a regressive tax that affects lower-income households disproportionately—while shifting that revenue source to businesses.

Why is this important

Food sales taxes directly impact household budgets, with lower-income families spending a larger percentage of their income on groceries. This change could meaningfully reduce cost-of-living pressures. However, the new business tax creates tradeoffs: it may affect business investment, employment, or pricing decisions, with potential ripple effects on the broader economy and tax competitiveness compared to neighboring states.

Potential points of contention

  • Revenue neutrality uncertainty: Whether the new business tax will actually generate equivalent revenue is unclear without specific rate details, potentially creating budget shortfalls or requiring adjustment
  • Business tax design and burden: Questions remain about which businesses are taxed, at what rate, and whether certain industries receive exemptions, affecting competitive fairness
  • Economic competitiveness: A new business tax could disadvantage Missouri businesses relative to competitors in states without such levies, potentially influencing business location decisions
  • Implementation complexity: Transitioning tax systems requires administrative changes and creates transition costs that may offset intended savings

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

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