"The Voice of Missouri Business®" Mid-Session Report - March 13, 2026

By Matthew Smith and Ray McCarty

March 13, 2026 - We are now at halftime in the 2026 Missouri Legislative Session and the legislators are on their spring break until March 23. Here is a recap highlighting some of our efforts on the highest profile issues on behalf of Missouri employers so far this session. These are bills that are still alive and likely to have some activity in the second half of the session.

Governor Kehoe's tax shift/reform (AIM currently opposes, but we are open to negotiating protections for Missouri businesses)

Despite objections from Associated Industries of Missouri, the Missouri House gave final approval to HCS HJR 173 & 174, a bill sponsored by Speaker of the House Jon Patterson and Rep. Bishop Davidson that asks voters for permission to increase sales and use tax rates and expand the taxes to services for the purpose of eliminating the individual income tax.

Although the sales tax must be expanded and increased to generate enough revenue to replace the individual income tax, supporters of the bill say it does not increase taxes at all, but uses growth in revenues to eliminate the income tax. Replacing the income tax would require $7.75 billion. For a point of reference, state revenues only increased $4.7 billion in the 10 year period from 2015 through 2025.

The ballot language voters will view is very misleading as it asks if voters want to phase out and eliminate the income tax, reduce local property taxes, reduce local sales and use taxes, modernize the sales tax, and protect school funding. Because the proposal does not inform voters a vote in support would authorize the legislature to pass any combination of tax increases and new taxes on any goods and services for a three-year period without voter approval, the measure may pass at the polls. The message to taxpayers from their elected officials: "Trust us."

Businesses, including small businesses and farmers, are completely excluded from the income tax rate phaseout and elimination, despite our efforts to include them. Existing sales tax exemptions are at risk. Corporations and other businesses are concerned the responsibility of funding state government will be shifted to businesses and away from wealthy taxpayers.

Also, while supporters say Missouri is not keeping up with states that have no income tax, Missouri is already VERY competitive with these other states. Read more HERE and HERE.

HCS HJR 173 & 174 is a high priority for Governor Mike Kehoe. He first mentioned his support of the idea in his State of the State Address in January. Associated Industries of Missouri is the only business advocacy organization taking a stand against the bill, but we remain open to negotiating in good faith, as we have for the last 6 weeks, in hopes of arriving at a compromise that protects Missouri businesses.

Gambling (AIM opposes)

HB 2989 (Rep. Hardwick) legalizes video lottery terminals (VLT), which AIM opposes. While it proposes to outlaw the gambling devices currently placed in convenience stores and truck stops across Missouri, that is unnecessary as the Attorney General and local prosecutors have received guidance from the courts that the machines are clearly illegal. In fact, the bill would legalize new VLT machines, in violation of the Missouri Constitution. Article III, Section 39 states the general assembly may not authorize gambling in Missouri, except specific forms of gambling that the constitution allows (such as the state lottery, bingo games at certain establishments, and casinos). Because these machines are illegal, they compete with legitimate businesses that operate within Missouri law. Missouri should not legalize gambling in convenience stores and truck stops. Unfortunately, this bill was passed out of the House of Representatives and has been referred to the Senate Select Committee on Gaming. However, leadership in the Senate has indicated they have no intention of letting this bill pass and we hope the bill will not make it to the Governor’s desk. Read more about the topic HERE.

Legal reform (AIM supports)

We are happy to say that three AIM priorities for tort reform have made it halfway through the policy process and are on the path to become law. Tort reform is essential in making Missouri a friendly place for the business community.

HCS HBs 1664, 1610, 1645 & 2182 (Seitz), would lower the statute of limitations from 5 years to 3 years for personal injury lawsuits brought after the effective date of the bill, August 28, 2026. In the past, we have supported lowering this number to 2 years, but have worked with sponsors to compromise at 3 years. Businesses are regularly impacted by frivolous lawsuits, and lowering the statute of limitations for personal injury will be fairer for all parties. This bill has been voted through the House of Representatives and is now in the Senate.

We also told you in previous reports about legislation that protects businesses from frivolous lawsuits in which trial attorneys claim business websites violate the Americans with Disabilities Act (ADA). Of course, this is just another way for these trial attorneys to target businesses for the sole purpose of gaining monetarily from the situation. SB 1272 (Sen. Trent), which prevents these kinds of lawsuits, was heard in the General Laws committee, combined with two other bills into SCS SBs 907, 1154 & 1272 (Sen. Hudson), and approved by the committee. The next step for this bill is to be debated before the entire Senate. HB 1694 (Rep. Christensen) on the same topic passed the House and has been referred to the Senate General Laws Committee. This bill was passed by the House in an unusual unanimous bipartisan vote, so we are hoping it will get a speedy hearing and be able to move through Senate debate in time for final passage.

HB 3205 (Rep. Casteel) prevents entities from adversarial countries (China, Russia, Venezuela etc.) and terrorist organizations from funding lawsuits in Missouri. We believe that only Americans should be able to join lawsuits, and foreign entities, especially from adversarial countries, should not benefit from our broken litigation system. This bill was passed out of the House of Representatives almost unanimously with only one member voting no. The next step is for this bill to be referred to a Senate committee where for a Senate hearing. SB 881 (Sen. Trent) is the companion bill in the Senate.

So far, we have had a very successful year in tort reform. However, the real fight is in the Senate, and all three of these bills still need to get over that barrier. We look forward to the debate on each of these bills and hope the Missouri Senate will fully support common sense and pro-business tort reform.

Funding the Department of Natural Resources (AIM supports)

SB 953 (Sen. Bean) provides a steady stream of funds to the Air Pollution Control Program by allocating a portion of currently collected sales and use taxes from utility companies to a special dedicated fund that may be used solely to provide funding for the Air Pollution Control Program. The bill also prevents the "sweeping" of such funds into general revenue - a practice that defeats the purpose of having a dedicated fund. The Air Pollution Control Program is essential for providing permits for projects that industries perform in Missouri. If funding for the program is inadequate, permits would be slowed, preventing important projects from being completed. This also would prevent encroachment from the EPA because if the program is not adequately funded, the EPA could take over enforcement. This bill has made it through the Senate, a major hurdle in getting legislation accomplished, and has been referred to the House Conservation and Natural Resources Committee where we expect a hearing later this month.

Workers Compensation Reform (AIM supports)

HB 2375 (Rep. Christ) strengthens Missouri’s workers compensation by requiring an injured employee to prove the injury and the need for medical treatment was caused by work. We have seen cases where employees receive workers compensation for preexisting conditions or diseases that were not caused by an injury at the workplace. This bill fixes that issue, along with making needed changes to the appeals process and requiring the credit for any insurance benefit a worker received when determining compensation due from the employer. This bill has been voted out of the House of Representatives and has been referred to the Senate General Laws committee.

Clarifying sales tax treatment of credit card fees (AIM supports)

The House Commerce Committee this week approved HB 1707 (Rep. Coleman) with a unanimous 10-0 vote. The bill modifies the definition of “gross receipts” to clearly exclude separately stated credit card transaction fees. Although current law excludes such fees from sales taxation in Missouri, the Missouri Department of Revenue has attempted to tax the fees in business audits. AIM objected to a recent regulation change initiated by the Department of Revenue to accomplish their goal of taxing the fees and the rule was never implemented. This bill would clarify language to ensure such fees are clearly exempt from sales and use taxes. The bill was approved by House and sent to the Senate for further consideration. The Senate companion bill, SB 1534 (Sen. Nicola), is on the calendar for debate in the Senate.

Providing relief to Missouri working families (AIM supports)

 HB 2409 (Rep. Shields) was also approved by the House Economic Development Committee on a unanimous 14-0 vote. This bill contains a package of incentives to support expanded childcare opportunities. This includes a tax credit for parents and employers providing contributions for childcare. Childcare has become a large burden on Missouri families who have children and want to return to the workforce. We support this because if a mother or a father wants to return to the workforce to provide for their families, childcare should not get in the way. This will help ensure Missouri workers have the flexibility to return to work and help our state grow. The bill is now eligible for floor debate by the full House of Representatives.

Banning solar projects (AIM opposes)

SB 849 (Sen. O’Laughlin) imposes a moratorium on the construction of new and current solar projects until December 31, 2027. AIM opposes this bill because of the problems it would cause Missouri solar providers and how it would negatively impact the reliability of our energy grid. We oppose prohibiting any form of energy generation, including coal and nuclear, and this includes solar as it currently generates around 2% of the total energy for Missouri. Further, many businesses have already invested millions into some of these projects, and this bill would halt those investments. This is not only unfair to those who are willing to invest in Missouri, it is an unconstitutional intervention by the state in a contract between private parties. The bill is currently awaiting debate by the full Senate.

Bills encouraging small modular nuclear power generation (AIM supports)

AIM supports HCS HB 2122 (Rep. Black and Rep. Haley) that encourages the development of small modular reactors (SMR) for power generation. The bills allow an exception to a voter-approved prohibition against including the costs of a power generation project in rates until the project is actually placed in service for nuclear generation facilities generating 600mw or less. We have included strong consumer protections in the bill that require the utility company to refund amounts included in rates with interest if the Public Service Commission finds imprudent expenditures or if the project is not place online within a reasonable amount of time (as determined by the Commission). HCS HB 2122 now awaits debate by the full House of Representatives.

SB 838 (Sen. Cierpiot) and HB 2807 (Rep. Hurlbert) incorporate the term “nuclear energy” in the definition of renewable energy within Missouri code. This means that nuclear energy will be considered a renewable energy source, which will incentivize its development in Missouri. Currently, utility companies’ energy portfolio is required to be made up of 15% renewable energy sources. This means that utility companies can reach this goal by utilizing and developing nuclear energy, which is a clean source of energy. Both bills have been voted out of the committee they were first assigned, and the next step is to be debated within their respective chambers.

Protecting contractors performing infrastructure projects (AIM supports)

HB 2926 (Rep. Parker) and SB 916 (Sen. Burger) provides immunity for private contractors, subcontractors, and employees of such contractors and subcontractors acting within the scope of a government contract awarded by the Missouri Department of Transportation (MoDOT.) We support this bill because infrastructure projects sometimes get tied up in litigation before they can even begin, and this will help streamline the construction of projects that are essential to our industries.

The Senate version of this bill is currently on the Senate informal calendar where it may be debated, and the House version has been voted out of the House Transportation Committee.

Broadband fairness (AIM supports)

HB 2155 (Rep. Hurlbert) and SB 1065 (Sen. Ben Brown) require local municipalities to reimburse broadband and cable companies (non-regulated utilities) when they are required to move their infrastructure due to road construction. These bills are very simple: If a public entity requires private industry to perform an action that costs money, the private industry should be reimbursed. Both of these bills have had a hearing and been voted out of committee and are waiting to be debated in their respective chambers.

Motion media tax credits (AIM supports)

HB 2142 (Rep. Wellenkamp), HB 2058 (Rep. Vernetti), and SB 1079 (Sen. Kurtis Gregory) updates the “Show MO Act” tax credit law, which currently provides a tax credit of $8 million for both film and television projects. This tax credit has brought in a new industry in Missouri, bringing investment and job growth with it. Currently, two “pots” exist: One for television and the other for films. These bills would put both together in one credit and limit the total amount of the credit to $16 million, allowing greater flexibility in the awarding of the credits. The bills also extend the sunset from 2029 to 2035. All three of these bills have been voted out of their chambers committee and are now waiting to be debated in their respective chambers.

Protecting private industry from local regulations (AIM supports)

HB 2085 (Rep. Keathley) prohibits local governments from banning and regulating ingredients of tobacco products, alternative nicotine products, and vapor products. We want to prevent a patchwork quilt of local government regulations. Many state and local governments have imposed these restrictions on these businesses and we want to prevent that from occurring in our state. This bill has made it through the House of Representatives and has been referred to the Senate General Laws committee. The next step for this bill is to be heard in that committee.

We intend to provide legislative updates to you on a weekly basis as we track the progress of these and other bills affecting Missouri businesses.