Senate sends vehicle sales tax bill to governor

Posted April 18, 2013 at 12:12 pm

by Taylor Beck

The Senate passed a bill Wednesday, April 3, which would force Missourians to pay a sales tax on their vehicles no matter where they were purchased.

If Gov. Jay Nixon signs the bill into law, residents will pay a sales tax when they title their vehicles. The tax rate will be the sum of the state and local sales tax rates. Nixon vetoed a similar measure last year.

A 2012 Missouri Supreme Court decision ruled the Missouri Department of Revenue could not collect local taxes on vehicles bought outside of Missouri, much to the dismay of car dealers near Missouri’s borders. Due to the high court’s decision, car dealers from neighboring states, such as Illinois, would advertise to Missourians that it would be cheaper if they purchased a car in those states rather than in Missouri.

The bill also prohibits municipalities and counties from imposing a use tax on the vehicles.

Taxing jurisdictions that have not previously approved local use taxes will have to vote whether to discontinue collecting sales tax on titling of motor vehicles bought outside of Missouri. If they do not vote by 2016, they must stop collecting the sales tax. Also, the jurisdictions can hold a vote to repeal the tax at anytime.

The Senate passed the bill to the House earlier this session. The House added language to the bill that sponsor Sen. Mike Kehoe, R-Jefferson City, said made the bill constitutionally “bullet proof.” The Senate approved these changes and sent the bill to the governor with a 32 to 0 vote.