Mo. lawmakers skip veto override on sales tax bill

Thursday, September 13, 2012

JEFFERSON CITY, Mo. -- Missouri House Republicans opted Wednesday to forgo efforts to override Democratic Gov. Jay Nixon's veto of legislation to allow communities to charge a local sales taxes on vehicle purchases.

No motion was made to override the veto, which requires a two-thirds vote. The override effort would have started in the House, where the tax measure first was introduced.

The legislature overwhelmingly approved the sales tax legislation this spring after a Missouri Supreme Court ruling that sales taxes cannot be charged when the car, truck, boat or trailer was bought in another state and then brought into Missouri. The decision also has been applied to instances when an individual sells a vehicle.

Lawmakers had pointed to fears about how the high court ruling would affect the bottom line of Missouri vehicle dealerships and the budgets of city and county governments. Nixon vetoed the bill in July and argued that it would have increased taxes without a vote of the people. His administration estimated the bill would have imposed a retroactive tax on 108,000 vehicle sales between individuals and about 14,000 sales made at an out-of-state dealership.

Republican House leader Tim Jones said there did not appear to be enough votes to override Nixon's veto. The GOP falls just shy of a two-thirds majority in the House and thus would have needed several Democrats' support.

Rep. Wayne Wallingford, R-Cape Girardeau, was an outspoken supporter of legislation re-establishing the tax due to his area's proximity to another state, Illinois. He voted in favor of the tax legislation that was vetoed by Nixon and rejects the argument that the legislation represents a new tax.

"We're not talking a new tax, if this was a new tax, I'd be the first one to vote against it," Wallingford said in a Southeast Missourian phone interview Wednesday.

Wallingford vowed to take up action on the tax in the next regular session, during which he'll be a senator representing the 27th District.

"We want to have vibrant economic development, but now we're saying let's send about a billion dollars worth of sales to other states," Wallingford said.

Cape Girardeau County estimates it will lose about $250,000 annually in taxes from out-of-state sales, and the city government estimates a $278,000 loss.

Jones, R-Eureka, accused Nixon of "extremely partisan, political gamesmanship" and said the bill did not increase the tax rate or create a new tax.

Jones said he would welcome a special legislative session. He said possible short-term solutions could include a sales tax holiday or rebate to give Missouri consumers an incentive not to cross state lines.

"If we had our choice, the best thing to do would be to have the governor show some leadership, call us into special session and solve this problem," he said.

But Nixon said he has no plans to call a special session and order lawmakers back to the Capitol. The governor praised the legislature for sustaining the veto and rejecting what he called a "retroactive car tax."

Election year politics appeared to play at least some role in a veto override debate that came less than two months before the Nov. 6 election.

State Rep. Tom Flanigan said he supported overriding Nixon's veto but that too many fellow Republicans were concerned it could be perceived as raising taxes. He said Joplin could lose $360,000 each year because it does not have a use tax.

"Nobody wants to get tagged with raising a tax -- even if it's a tax that's been around since 1949, it's not a new one," said Flanigan, R-Carthage.

The state Supreme Court ruled Jan. 31 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 by in-state retailers, and "use taxes," which are levied on products used in Missouri but bought from an out-of-state retailer or from an individual.

Under the court ruling, local governments could charge a use tax but only if such a tax has been approved by local voters.

More than 90 communities and 41 of 114 counties have a local use tax. Both the state's largest cities, Kansas City and St. Louis, have a use tax. Neither Jackson County nor St. Louis County levy the tax.

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