Senate sends use tax ‘fix’ to governor

With no dissenting votes, the Missouri Senate sent Gov. Jay Nixon a bill Wednesday afternoon that would re-establish local sales taxes on vehicles purchased in other states.

The Missouri Supreme Court last year overturned those taxes in cities and counties where voters previously had not approved a “use” tax on those purchases.

But the new law eliminates both state and local use taxes on the storage, use or consumption of motor vehicles, trailers, boats or outboard motors — then specifies that a sales tax is to be collected when the owner seeks to title the property.

“They’re not new taxes, at all,” Senate sponsor Mike Kehoe, R-Jefferson City, said after the vote. “This just allows those municipalities and counties to go back to collecting what they always had collected — some since 1949.”

The change also should resolve the Supreme Court’s concern, Kehoe said.

“It’s called a ‘sales tax,’ because that’s what you pay the state when you buy that car where you live,” he explained. “Since we call it a sales tax right now, as the state of Missouri, it would automatically trigger whatever local taxes are in place to, also, be called a sales tax.”

The Senate’s vote came just hours after the House passed the measure, with some changes to the original Senate bill okayed on Feb. 18.

The new proposal also is different from the bill passed last year, that Nixon vetoed because it didn’t require communities to hold a vote to approve the tax.

Kehoe said he and other lawmakers didn’t agree with the governor’s veto message, “but we went as many steps farther as we could, to enlist as many experts as we could, to get this bill written as tightly to the constitutional concerns that he specifically addressed. We believe we accomplished those.”

The new measure has an emergency clause, so it would go into effect as soon as Nixon signs it — if he does.

Kehoe told colleagues the governor’s office has made no promises on the bill.

But, he told the News Tribune, he and others worked with Nixon’s staff in writing this year’s version of the bill, “so I’m very hopeful that he will now sign it.”

The new measure also requires voters to vote between November 2014 and November 2016 to block the tax, if they had not approved it previously.

Among others, Jefferson City, Columbia and Boone County would have to hold those votes, but Cole County voters already have okayed the tax.

Kehoe reminded colleagues that, since the Supreme Court’s ruling in January 2012, local communities have lost millions of dollars in revenue.

“Municipalities lost $43 million in revenue, in the eight months of 2012 (the ruling) was in place,” Kehoe explained, “so, it’s a huge impact for public safety and budgets all across the state.”

And many dealers, especially along the state’s borders, have lost business to their counterparts in other states.

In the more than 14 months since the high court ruling, Kehoe said, “We had testimony in hearings in both the House and the Senate where we saw dealers in Illinois, for instance — who had always been in a St. Louis area manufacturer’s rating of 15, 16 or 20 — all of a sudden they were number four” because of the extra Missouri customers they were getting.

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