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HB 2650

Reduces the assessment percentage of tangible personal property over a period of years

2026 Regular Session Introduced by Tricia Byrnes

HB 2650 would, with voter approval, phase out tangible personal property taxes over five years (26.6% to 0%), replacing revenue via a sales tax or elimination.

Referred: Emerging Issues(H)
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Bill Summary · HB 2650

Bill overview

  • Bill: HB 2650
  • Session: 2026
  • Jurisdiction: Missouri
  • Title: Reduces the assessment percentage of tangible personal property over a period of years
  • Sponsor: Representative Byrnes (co-sponsor: Tricia Byrnes)
  • Status: Referenced to Emerging Issues (H) after final passage by chamber; dates indicate introduction in early 2026 with subsequent readings and referral

Main purpose and intent

HB 2650 seeks to allow (upon voter approval) the elimination of tangible personal property taxes in cities not within a county or in counties themselves. If voters approve elimination or replacement with a sales tax, the bill gradually reduces the assessment percentage of tangible personal property over five years, ultimately phasing out personal property taxation for such property. The approach combines two elements:
- voter-approved elimination/replacement of personal property taxes
- a scheduled, multi-year reduction in the assessment percentage leading to zero assessment after five years

The measure also requires a constitutional amendment before taking effect.

Key provisions and changes

  • Section 137.115 changes:
    • Requires annual listing and assessment of tangible personal property unless/until elimination or replacement takes effect.
    • Establishes a sliding reduction schedule of the assessment percentage over five years after adoption:
    • Year 1 after adoption: 26.6% of true value
    • Year 2 after adoption: 19.9% of true value
    • Year 3 after adoption: 13.2% of true value
    • Year 4 after adoption: 6.5% of true value
    • Year 5 and subsequent years: 0% (no assessment or tax)
    • After year 5, tangible personal property would no longer be assessed or taxed, and the assessor would stop listing such property.
    • The reduction applies to jurisdictions that eliminate personal property taxes or replace them with a sales tax; the reduction would begin on January 1 of the calendar year immediately following adoption.
  • Elections and replacement options:
    • A city not within a county or a county may submit a question to voters at a general election to eliminate tangible personal property taxes.
    • Voters may also decide to replace personal property taxes with a citywide or countywide sales tax, with the sales tax rate set to replace the lost revenues.
    • If voters approve elimination or replacement, the reduction schedule described above takes effect unless otherwise amended.
    • If voters approve elimination/replacement, the tangible personal property is eliminated or replaced beginning January 1 of the following year.
  • Opt-out provisions:
    • Counties or cities not within a county may opt out of these provisions (subject to specified procedural rules tied to prior tax policy measures).
    • If opting out, the jurisdiction would continue current personal property taxation and not impose the replacement sales tax.
  • Other property tax administration details remain (e.g., real property assessment, manufactured homes, valuation methods, etc.) but are subject to the overarching elimination/reduction if adopted.
  • Constitutional prerequisite:
    • Section B notes that the repeal and reenactment of section 137.115 becomes effective only upon passage and approval by voters of a constitutional amendment relating to eliminating personal property taxation.

Who would be affected

  • Cities not within a county and counties contemplating elimination/replacement of tangible personal property taxes, should voters approve the measure.
  • Taxpayers who own tangible personal property in those jurisdictions (e.g., businesses with taxable personal property, and other non-real property assets currently taxed).
  • Local assessors and county/state tax administration, which would implement the staged reduction and eventual elimination if adopted.
  • Jurisdictions considering substitution of property tax revenue with a sales tax.

Procedural and timeline aspects

  • Adoption timeline:
    • If voters approve elimination or replacement, phase-down begins January 1 of the calendar year after adoption.
    • The five-year reduction schedule runs as follows:
    • Year 1: 26.6% assessment
    • Year 2: 19.9%
    • Year 3: 13.2%
    • Year 4: 6.5%
    • Year 5 and thereafter: 0% (no assessment)
  • After five years, tangible personal property would not be assessed or taxed; no listing of tangible personal property would be required by the assessor.
  • Constitutional requirement:
    • The full change hinges on a concurrent constitutional amendment approved by voters.
  • Opt-out mechanics:
    • Jurisdictions can opt out prior to general reassessment under specified conditions, preserving current tax structures for the year(s) until opt-out is enacted.

Practical impact considerations

  • Significant reduction in local tax revenue from tangible personal property over a five-year period if elimination/replacement is approved.
  • Potential shift in revenue to sales taxes if voters choose replacement, affecting business and consumer tax burdens.
  • Administrative transition from property tax assessment to alternative revenue sources requires careful planning, including revenue forecasting and implementation of sales tax administration where applicable.

If you’d like, I can compare HB 2650 to prior related bills (e.g., HB 903 of 2025) or outline potential fiscal impact estimates based on hypothetical jurisdictions.

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

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