Lawmakers are hoping the third time will be the charm in their quest to reinstate local taxes on cars, trucks and boats purchased from out-of-state dealers or in private transactions.
State and local officials have keyed on the tax issue for more than a year while raising fears about lost jobs, business hardships for Missouri vehicle dealers and declining revenue for cities and counties. Lawmakers gave final legislative approval Monday to the most recent effort to allow cities and counties to continue their local taxes. It was paired this time with the creation of a new relief fund aimed particularly at the Joplin tornado.
Gov. Jay Nixon twice has vetoed previous efforts dealing with local vehicle taxes. Nixon rejected a measure last month after citing what essentially amounted to technical problems.
The most recent measure now headed to Nixon would redefine vehicle sales taxes by applying them to the titling of vehicles in Missouri. The newly defined tax would kick in immediately upon Nixon's signature. Between November 2014 and November 2016, local governments would need to give voters the chance to repeal the redefined tax for vehicles bought out of state or from individuals.
At issue is a January 2012 decision by the Missouri Supreme Court that Greene County could not charge a local sales tax on a man who bought a boat, motor and trailer from a dealer in Maryland. The court drew a distinction between sales taxes, which are collected from in-state retailers, and "use" taxes, which are levied on products used in Missouri but bought either from an out-of-state retailer or from an individual who does not run a business.
The high court ruled Greene County could not tax the boat and its accessories because they were not covered by the local sales tax and county voters had not approved a local use tax. That has meant cities and counties could not levy a tax on vehicles bought anywhere other than a Missouri retailer, without a voter-approved use tax. More than 50 of Missouri's 114 counties and more than 100 of its 950 municipalities now have local use taxes allowing them to collect taxes on all vehicle sales.
Nixon's administration has said there were 112,000 vehicles bought from out-of-state dealers and 650,000 vehicles sold in non-retail transactions in 2012.
The state House approved the vehicle tax legislation 118-32 on Monday, and the legislation cleared the state Senate last week 30-2.
House Speaker Tim Jones said lawmakers have worked with the governor's office on the measure.
"It would be a shame if Missouri's small-business owners who operate in the auto industry are punished again on something that they're just trying to find a solution for," said Jones. R-Eureka.
The legislation contains several components, including the creation of a $15 million fund for infrastructure repairs in areas where there is a presidential disaster declaration. The fund is particularly meant to help Joplin to rebuild street curbs and gutters that were damaged from a deadly tornado in May 2011. The disaster recovery fund would be funded by diverting money from other governmental entities.
The legislation would include $10 million from the state insurance department and $4 million from the Missouri Health and Educational Facilities Authority, which provides financing to medical centers and schools.
Besides the curb and gutter repairs, the money is to match the cost of the heavy equipment used to clean debris.