"The Voice of Missouri Business®" Weekly Report- April 9, 2026

By Matthew Smith and Ray McCarty

April 9, 2026 - Here is a recap highlighting some of our efforts on the highest profile issues on behalf of Missouri employers this week.

Tax shifting proposal (AIM opposes)

HJR 173 (Rep. Davidson), Governor Kehoe’s proposal to shift funding for state government from individual income tax to sales and use taxes, continues to advance, despite strong opposition from Associated Industries of Missouri. The bill contains no protection against increasing the burden of funding state government to businesses. It does not protect against creative new taxes that could be implemented, does not protect current sales and use tax exemptions, does not prohibit an increase in the corporation income tax and could result in multiple point taxation (taxing inputs that are used to provide taxable goods or services, similar to a value-added tax, or VLT).

Although AIM was successful in convincing the Senate committee to change the bill to allow all businesses organized as pass-through entities to enjoy the tax reduction and elimination (after weeks of negotiations where we were told this change was a “no brainer” by the bill’s sponsor and House leadership), the additional business protections listed above are not included in the current version of the joint resolution. We only have one more step in the process, deliberation on the Senate floor, to add these business protections and, until they are added, we will continue to strongly oppose the bill.

If the bill is approved by the Senate and the Senate changes are approved by the House, the joint resolution would appear on the ballot in November, or sooner if the Governor moves the election date.

The bill contains a major flaw in the Senate committee version that would dramatically accelerate the tax reduction if the language remains in the bill. The bill requires a full fiscal year to be compared with a half fiscal year. If the full fiscal year revenues exceed the half year fiscal year revenues (which will always happen), the tax rate would be reduced. Had it been in effect this year, the tax rate would have been reduced by the maximum amount allowed in the legislation, 1.6%, resulting in an approximate $2.5 billion reduction in state revenues. That would mean legislators would be scrambling for new revenue sources in a very short amount of time, increasing our concern that the Legislature would place more burden on the business community.

Also, the legislation was changed to increase the length of time the General Assembly would have a free pass to increase sales and use tax rates and the services to which the taxes apply from three years in the House version to five years in the Senate committee version. Allowing lawmakers that much time to craft a tax proposal without a second vote of the people is dangerous.

Governor Kehoe will not have a final say in the joint resolution as he would with other bills, so if the bill contains mistakes or omissions, such as the one made in the Senate committee version (if it is indeed a mistake), there will be no way to stop the flawed proposal from appearing on the ballot.

We anticipate the bill will be brought up very soon in the Senate, potentially next week. We will keep you posted of our efforts. Associated Industries of Missouri continues to be the only statewide business advocacy organization that is standing up for Missouri businesses in opposing the legislation.

Protecting businesses from frivolous lawsuits (AIM supports)

Last week, we told you about SB 907 (Sen. Hudson) which would prevent lawsuits that have recently been threatened against businesses operating websites that allegedly violated the Americans With Disabilities Act (ADA.) This is a scheme used by a trial attorney to scare businesses into settling, only to make a quick buck.

Fortunately, this bill was voted out of the House Commerce Committee this week. The bill was approved by “consent.” As a result, the bill will now go to a second House Committee for another vote and then would be placed on a special calendar in the House for debate. Changes made in the House version of the bill will need to be approved by the Senate or the bill’s final details worked out by a conference committee to find a compromise between the House and Senate positions.

Regardless, this bill is in a great position for passage, and we appreciate the hard work of the sponsors of this bill and their leadership in protecting Missouri businesses from frivolous lawsuits.

Lowering the statute of limitations (AIM supports)

This week, the Senate General Laws committee passed HB 1664 (Rep. Seitz), which would lower the statute of limitations for personal liability from five to three years. This is one of AIM’s main priorities, as it would prevent frivolous lawsuits from being imposed on industries.

Often, trial attorneys will take advantage of the full length of time allowed for filing of a lawsuit – in some cases waiting to sue until close to the five-year time limit.  This puts the defendant at a disadvantage, given evidence of innocence could be lost, employees and witnesses may have little or no memory of the incident, etc. We believe three years is an acceptable amount of time, and we should join the vast majority of states in fixing the statute of limitations for personal liability at three years.

The next step for this bill is to be placed on the Senate calendar and be debated before the entire chamber.

Clarifying exemption of credit card and debit card fees (AIM supports)

Earlier this year, we told you about HB 1707 (Rep. Coleman) moving through the General Assembly that would clarify that credit card and debit card transactions are not subject to sales taxes. The Department of Revenue should already be following law that states they are subject to these taxes, but because of their refusal to do so, we must pass legislation that further clarifies the law for the Department.

This bill was heard this week in the Senate Economic and Workforce Development Committee. The next step for the bill is to be voted out of committee and place on the Senate calendar to be debated before the entire chamber.

Settlement demand legal reform (AIM supports)

The Missouri House this week approved HB 2927 (Rep. Parker) that fixes a loophole created by clever trial attorneys in a previous reform bill we passed several years ago. AIM backed the original legislation that prevented trial attorneys from presenting “time-limited demands” without allowing defendants or their insurance companies sufficient time to evaluate and process claims.

Trial attorneys responded by eliminating the expiration dates on demand letters but still claiming insurers that did not respond within a short time were acting in bad faith, allowing the plaintiff to seek damages exceeding policy limits.

This legislation would fix the loophole, and AIM fully supports the bill. The bill now will move to the Senate for further consideration.

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.