The Missouri Association of Realtors donated $1.9 million to the campaign opposing Amendment 5 on Tuesday, escalating the fight over a proposed constitutional amendment that would create a pathway for lawmakers to eliminate the state income tax through expanded or increased sales taxes.
The contribution to Missourians for Fair Taxation came days after Missouri Promise PAC, the committee backing Amendment 5, reported receiving $1.9 million from Missouri Promise Inc., a same-name nonprofit incorporated in Delaware whose donors are not publicly disclosed.
The nearly identical donations — the Realtors donation was $1 more than Missouri Promise’s check — make clear that the August ballot measure is quickly becoming one of Missouri’s most expensive and politically consequential fights of the year.
If approved by voters, lawmakers would be directed to establish revenue triggers for reducing the top state income tax rate, which is currently 4.7% for taxable incomes greater than about $9,200. It would grant lawmakers five years to change what is covered by sales tax or increase the rate to generate revenue to speed the elimination of the income tax.
The revenue triggers are not specified. If no additional transactions become subject to the sales tax, the current rate of 3% would have to increase to as much as 11.5% to replace the money generated by income tax.
Opponents argue the amendment would give lawmakers broad new taxing power and could shift more of the cost of government onto everyday purchases and services.
Scott Charton, spokesman for Missourians for Fair Taxation, said the Realtors’ money comes from members across the state who are trying to defeat what opponents have branded the “Everything Tax.”
“These donations come from the pockets of Realtors who are on every Main Street, suburban circle and country road across Missouri,” Charton said in a statement. “We have 26,000 hardworking grassroots members who are mobilized to protect taxpayers against the deceptive Amendment 5’s Everything Tax.”
The Realtors have been among the most vocal opponents of Amendment 5, warning that the proposal could allow lawmakers to revisit constitutional protections voters previously approved against real estate transfer taxes and new sales taxes on services.
The Missouri Association of Realtors backed a successful 2010 constitutional amendment banning real estate transfer taxes, and supported a 2016 amendment prohibiting new sales taxes on services.
Charton said Amendment 5 threatens both protections.
“The real agenda behind Amendment 5 is to trick voters into giving politicians a license to ignore current constitutional taxpayer protections approved by the people,” he said.
Supporters of Amendment 5 reject that characterization and say the proposal is about eliminating Missouri’s income tax and creating a stronger economy.
Joe Lamie, spokesman for Missouri Promise PAC, said working families have “shouldered the tax burden for far too long.”
“No matter how much money is spent to preserve the status quo, our state is falling behind. If Missouri is going to compete in the modern world, we need a new tax code that lowers taxes, attracts jobs, and unleashes our economy,” Lamie said. “Passage of Amendment 5 will put money back in the pockets of taxpayers and Missouri back in the race for jobs and growth.”
Missouri Promise PAC reported last week receiving $1.9 million from Missouri Promise Inc. The nonprofit was incorporated in Delaware late last year and authorized to do business in Missouri earlier this year. Its Missouri filing lists Garrett M. Lott as chairman, officer and registered agent, and lists as its principal place of business a private mailbox at 701 Market St. in St. Louis.
The filing states that Missouri Promise Inc.’s purpose is “to promote the common good and general welfare.”
Missourians for Fair Taxation argues Amendment 5 would weaken the Hancock Amendment, the 1980 constitutional provision requiring voter approval for certain tax increases, and that the measure is so broad that voters cannot know how much taxes could ultimately rise if it passes.
“Amendment 5 is so vague, even the state auditor cannot say how much taxes could ultimately go up, which means Missourians are being asked to approve a constitutional change without knowing the full impact to their own pocketbooks,” Charton said.
The state auditor’s fiscal note says the General Assembly already has authority to reduce the state income tax , Charton noted, arguing that a constitutional amendment is unnecessary.
