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Amendment 3 would stop real estate transfer tax
While 38 other states place a sales tax on the transfer of real estate, Missouri doesn't and local real estate agents want to keep it that way.
Amendment 3 on the Nov. 2 ballot, if approved, would prohibit new taxes from being imposed when property changes hands.
The Missouri Realtors Association worked to put the measure to a vote in an effort to look out for the rights of private property owners, said David Soto of Soto Property Management in Cape Girardeau. He serves as the local Yes To Stop Double Taxation campaign chair.
There has not been an attempt to impose a transfer tax in Missouri, but real estate agents are taking a proactive approach to prevent what they call "double taxation" it from happening with Amendment 3.
"Right now 'tax' is a terrible word. We don't need another tax," said Soto. "We are already paying property taxes."
Any new real estate taxes would be devastating to the already weak housing market, according to Jeff Martin of Realty Executives in Cape Girardeau, president of the Cape Girardeau County Board of Realtors.
"The housing market runs the economy and as fragile as the economy is right now, if the state chose to impose a transfer tax, it would cause a significant slowdown in the economy in the state of Missouri," Martin said.
In addition to punishing homeowners, those who support Amendment 3 and oppose transfer taxes say such taxes would hurt businesses too, especially small businesses.
"Any such tax would be a lug on the ability to buy and sell property of all types and would just be another burden on family businesses that want to keep businesses in the family," said Ray McCarty, president of Associated Industries of Missouri, an organization that supports Amendment 3.
Real estate transfer taxes in other states apply not only to new home sales, but also when someone transfers property from one corporation to another, or from their own name into a trust, Soto said.
Organizations that have endorsed Amendment 3 include the Missouri Bankers Association, Home Builders Association of Missouri, Missouri Land Title Association, Missouri Cattlemen's Association and Mortgage Bankers Association of Missouri.
Amendment 3 doesn't have any organized opposition, but those who hope to end the state's income tax and replace it with a new FairTax system based solely on sales taxes say it will pre-empt their efforts.
"If Amendment 3 eliminates the potential for a sales tax on new homes, we'd just have to raise the percentage of sales tax on everything else we buy to make up for it," said Dan Dickerson of Jackson, who opposes Amendment 3.
Dickerson said he supports replacing complicated, loophole ridden income tax codes with a fairer sales tax system.
"We the people will pay the tax at the cash register with no forms to fill out come April 15 and no IRS to deal with," Dickerson said.
Another opponent of Amendment 3 is Rep. Ed Emery of Lamar, Mo., who supported the Missouri Jobs and Prosperity Act of 2010, a failed attempt in the last legislative session to reform Missouri's tax codes and create a FairTax system here.
Supporters of Amendment 3 say their biggest challenge is getting voters to understand that voting yes means no new real estate taxes.
"We're afraid people will see the word 'tax' and vote no because they don't want higher taxes, but in this case, voting yes is what prevent new taxes," Soto said.