Gov. Nixon urged to sign Missouri vehicle sales tax

Sunday, July 8, 2012

JEFFERSON CITY, Mo. -- Gov. Jay Nixon already has voiced reservations about legislation reinstating local taxes on vehicles purchased out of state, but that is not stopping Missouri mayors, city council members, county commissioners and vehicle dealerships from urging the governor to change his mind and sign the bill.

Missourians long have paid state and local taxes on vehicle purchases when they register their vehicles. But the state Supreme Court ruled earlier this year that some local taxes cannot be levied when the purchase is made in another state. That's because not all cities and counties have adopted a local "use tax," which applies to items used locally but bought without paying a home-state sales tax. A "use tax" often is charged at the same rate as a sales tax.

The legislature passed a bill that attempts to reverse the high court's ruling. Under the measure, Missourians who buy vehicles out of state would be charged both a state tax and a local tax equivalent to that of the Missouri city and county in which they live.

Within hours of the bill's final passage in mid-May, Nixon criticized the proposal in uncharacteristically blunt terms, saying the bill "would bypass a vote of the people and improperly impose a tax increase."

Officials and businesses from Joplin to O'Fallon hope they can evoke a change of heart before Nixon's July 14 deadline to sign or veto the measure.

Mayors, administrators, RV dealers and others already have sent more than 100 emails, letters and online messages urging the governor to sign the legislation. City councils in about two-dozen communities approved resolutions endorsing the legislation. And the Missouri Municipal League said it again is urging officials to contact Nixon's office.

In a batch of messages provided to The Associated Press under an open records request, the stack from the bill's supporters towered over the comments from just a handful of opponents who urged a veto and complained the measure would increase taxes.

Local government officials warn their communities could lose millions of dollars in revenue without the legislation. Car and recreational vehicle dealerships fear lost customers as people travel elsewhere for the tax break.

Sheri Wheelen, the president of the Missouri RV Dealer Association, said the sales tax is the most significant issue for her organization in recent years and that dealerships in other states now can advertise tax breaks to Missouri customers. Wheelen, who with her husband owns Wheelen RV Center in Joplin, said she has contacted Nixon's office about a half-dozen times about the bill.

"People will drive an extra 200 miles to save $100," Wheelen said in an interview. "So I'm sure once it gets out ... they'll be changing the way that they buy vehicles."

From the government perspective, communities said they depend on sales tax revenue to help pay for ambulance districts and other services. Officials said reinstating or continuing a levy on vehicle purchases does not amount to a tax increase.

"To state that motor vehicle sales taxes paid to the local municipality is an increase in taxes to the citizens is tantamount to the following argument: I have one cup of coffee every morning. I did not have a cup of coffee today, so if I resume my one cup of coffee tomorrow, I am increasing my caffeine intake. It doesn't really correlate," wrote Nancy Edson, the city administrator in Rogersville. The community of just over 3,000 people is about 20 miles east of Springfield.

Besides lobbying Nixon, some officials are evaluating another option. Although the state Supreme Court rejected sales taxes for out-of-state vehicle purchases, the high court said use taxes could continue -- if they are approved by voters.

So far, 40 counties have use taxes, but the Missouri Association of Counties said numerous others now are considering whether to ask voters to approve one. Dunklin County in the Bootheel passed a new use tax in June, and voters in central Missouri's Osage County are considering next month whether to enact a use tax.

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