Harbison drafts destination tax for small counties

11/21/2025

Mo. Rep. Tony Harbison (144th district) is drafting a ‘Destination Tax’ proposal for seven counties to be submitted for next year’s legislative session.

A destination tax would not raise anyone’s sales tax, but redirect them from three first-class counties back to the purchaser’s county.

The three first-class counties, which have an evaluation over $900 million, are Cape County, St. Francois and Jefferson. Residents who live in the following counties would benefit: Iron, Madison, Reynolds, Shannon, Wayne, Washington and Bollinger.

“The primary reason for this is to offset, and hopefully eventually replace property tax,” Harbison said.

Harbison said the destination tax will be one solution among many for the growing frustration with increasing property tax, which Missouri created a special House Committee to hear about across the state this fall. One option the committee is most geared towards is to “silo” four different types of property, and tax them differently: agricultural, commercial, personal and residential.

Tony Harbison, State Representative

Fredericktown School District Superintendent Shannon Henson said at a board meeting that losing property taxes could cost the school $1.7 million per year. Joe Gilgour, the Mineral Area College president, said the college could lose a third of its budget. 

Harbison explained the destination would work by cashiers asking after each transaction for a ‘transaction number,’ of which his pilot program would have seven – one for each beneficiary county. The eighth would tax the county of the transaction.

“You won’t have to show proof, a lot of it would be courtesy,” Harbison said. “I say I’m from Iron County, she’ll push one of eight numbers to make transactions complete.”

Harbison said just for comparison, St. Francois county banks more money than the entire budget of Iron County. Much of this is due to stores like Walmart, Harbison said, which, for example, skews Iron County customers strongly towards shopping in Farmington. “In my actual district, I only have three fast food restaurants,” Harbison said.

“If you took all 7 counties and took the full counties, there’s about 80,000 people,” Harbison said. “If you break it down to people with purchasing power, people 18 and above, you’re only looking at around 50,000 [healthy adults]. So it’s not like, we’re gonna break Cape, Jefferson, St. Francois County. They all have revenue sources that we don’t have.”

Harbison wanted to make clear that it would not increase anyone’s expenses.

“We are not after their money,” Harbison said about other counties. “The destination tax is a way for money to ‘Follow us home.’”

He said a form of the destination tax exists in 34 other states, and his proposal would use 7 counties for a pilot program. This might ease it through the arduous lawmaking process, which can be jammed by one fickle committee or powerful lobbyist.

The pilot program would allow the money raised for each county to be pooled for a year to determine how much it will offset property taxes. “I would like to think it will pull quite a bit, since it’s never been done,” Harbison said. “At least not in Missouri.”

Since the tax mostly addresses larger shopping outlets and chains like Walmart or fast food, which draw a substantial amount of customers from less populated counties, it would have exceptions for small businesses.

“I don’t want to put an extra burden on small business, whether it’s in Iron or St. Francois County. I’m looking at Walmart, Lowe’s, where our residents are forced to shop, since we don’t have the product to shop,” Harbison said. He said farm equipment and resources, like hay baling, are often outsourced.

The draft will be filed by December, Harbison said. And then January will begin the process of sending the bill through committees, presentations, votes, speakers and lawmakers, which typically ends over 90% of all submissions. Last year, Harbison said, only passed 67 of 2,000 bills — an “exceptionally good year.”

“Is it gonna be hard, yes,” Harbison said. “But we’re gonna work hard and do the best we can. That’s why they hired me.”