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Court ruling alters taxes on vehicle purchases

Missourians who buy vehicles in other states could get a tax break under a recent state Supreme Court ruling, but that could reduce the revenue for some local and county governments.

Before the court ruling, Missourians paid sales taxes on vehicle purchases in their home communities during registration. Now local sales taxes cannot be levied for purchases made in other states, but communities can charge a local use tax if voters have enacted one. Currently, 39 counties and St. Louis city have a use tax.

The Missouri Association of Counties said in a memo that the tax court ruling was finalized last week.

The tax change could reduce revenue for local and county governments, but it is not known exactly what the affect will be.

Missouri Department of Revenue spokesman Ted Farnen said the location of a vehicle sale is reported but the state agency has not gathered information about revenue from vehicles purchased outside Missouri. Cape Girardeau County Treasurer Roger Hudson said lost tax revenue already has been an issue when buyers make large purchases such as construction equipment over the Internet or in another state. He said the state Supreme Court’s ruling puts vehicles in the same category.

“That’s been a problem in terms of fairness,” Hudson said.

The court case stemmed from a Greene County man’s objections to paying local sales taxes on a boat, motor and trailer that he purchases in Maryland and brought into Missouri. The high court ruled state sales taxes only apply to purchases made within the state.

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