SJR 98 - This constitutional amendment, if approved by the voters, prohibits counties and political subdivisions from levying or collecting a tax on real property beginning January 1, 2027. In lieu of such property tax, the amendment requires a county to impose a sales tax on the sale of real property at a rate equal to the total combined rate of state and local sales taxes in effect at the location of the property, provided that all revenues generated by the tax are collected and distributed by the county in the same manner as the property tax levied prior to January 1, 2027. A taxpayer shall select whether to remit the tax due upon the transfer of the title of the property, or to remit ten percent of the sales tax due to the county collector upon the transfer of title of the property, and the remainder within five, ten, or fifteen years in equal annual installments. Financial institutions that are mortgage servicers shall pay sales tax obligations which they service from escrow accounts in one payment by the required due date. This amendment also requires a taxpayer who purchases his or her real property prior to January 1, 2027, to remit a tax equal to the total combined rate of state and local sales taxes in effect at the location of the property multiplied by the remaining mortgage balance on such property, provided that all revenues generated by the tax are collected and distributed by the county in the same manner as the property tax levied prior to January 1, 2027. A taxpayer shall select whether to remit the tax due by December 31, 2027, 2032, 2037, or 2042, with such payment made in equal annual installments. Financial institutions that are mortgage servicers shall pay sales tax obligations which they service from escrow accounts in one payment by the required due date. (Section 4(e)) This amendment also modifies a constitutional provision prohibiting sales taxes on transactions that were not subject to tax as of January 1, 2015, by providing an exemption for the sales tax imposed pursuant to the amendment. (Section 26) This amendment is identical to SJR 7 (2025), SJR 82 (2024), SJR 18 (2023), and SJR 59 (2022). JOSH NORBERG

2026 Regular Session Introduced by Rick Brattin

Missouri constitutional amendment replacing property tax on real property with sales tax as primary revenue source for schools and local services.

Second Read and Referred S Select Committee on Property Taxes and the State Tax Commission Committee

Legislative bill overview

SJR 98 proposes a constitutional amendment to replace Missouri's property tax on real property with a sales tax as a revenue source. This would fundamentally alter the state's tax structure by eliminating the primary revenue mechanism for local schools, counties, and municipalities while substituting sales tax collection instead.

Why is this important

Property taxes fund approximately 45% of Missouri's K-12 school budgets and are critical revenue sources for county services and local infrastructure. Shifting to sales tax would significantly alter how these essential services are funded and could dramatically change tax burdens across different income groups and regions, since sales taxes are regressive (hitting lower-income households harder) while property taxes can be progressive based on asset value.

Potential points of contention

Regressive tax impact: Sales taxes place proportionally higher burdens on lower-income households compared to property taxes, potentially increasing inequality

Revenue uncertainty: Sales tax collections fluctuate with economic cycles, creating budget instability for schools and local services that currently rely on predictable property tax revenue

Implementation complexity: Replacing a statewide property tax system with sales tax requires addressing how to fund local governments fairly across urban and rural areas with different consumption patterns

Constitutional constraints: Missouri voters previously rejected similar tax replacement measures; this requires voter approval as a constitutional amendment