Counties look forward to out-of-state vehicle sales tax

Missouri municipalities and counties with voter-approved permission to collect use taxes on out-of-state purchases of cars, trucks and boats won't see a change in the money coming in as the result of a law signed by Gov. Jay Nixon last week.

The ones without that authority, though, are looking forward to putting some once-lost revenue back on the books, at least temporarily.

A state Supreme Court ruling last year disallowed vehicle sales taxes to be collected by cities and counties when the purchases were made beyond state lines, or from a person who doesn't own a business. To make up for lost revenue, some communities asked voters to authorize the collection of use taxes equal to the local sales tax amounts. Estimates of lost tax money for local counties ranged from $250,000 annually in Cape Girardeau County to $57,000 in Bollinger County.

Bollinger and Perry counties, along with the city of Perryville, received voter approval in April to collect use taxes on vehicle purchases. With the new law now in place, their ability to collect won't change. But in Cape Girardeau County, where no use tax question was on the ballot, the tax money will return.

Within the next two years, local governments that did not previously have a voter-approved use tax must give voters a chance to repeal the titling sales tax for vehicles bought out of state or from individuals.

Presiding Commissioner Clint Tracy said that allows county officials some breathing room.

"Now people will have time to understand it and make a decision, without the rug getting jerked out from underneath us," Tracy said.

Cape Girardeau County commissioners approved a slight increase in property tax starting in 2013 in part to make up for lost vehicle sales tax revenue.

Many local government officials opposed the court ruling because of the hit to their budgets. Tracy and other officials such as Scott County Presiding Commissioner Jamie Burger said the no-collection issue caused an unlevel playing field for vehicle dealers, since Missouri buyers could make a purchase in a neighboring state, bring it home and skip paying local taxes. Only the state use tax of 4.225 percent has been levied in areas with no local use tax.

Scott County asked voters for a use tax in April, but the ballot issue failed.

Officials in Perry and Bollinger counties said Monday they have yet to hear from the Missouri Department of Revenue about any adjustments they may need to make to tax collection methods with the new law in place, but believe there won't be a noticeable change or one at all since the use taxes charged there are the same amount as local sales taxes, and purchases won't be double taxed.

Before signing Senate Bill 23 on Friday, Nixon twice vetoed previous bills that sought to reimpose the local vehicle taxes. His office said in a written statement that previous bills "did not sufficiently protect Missourians' right to vote on tax policy" but the most recent version "addresses these concerns by requiring a public vote in local jurisdictions without a local use tax."

Tracy said Cape Girardeau County did not place a use tax question on the ballot in April because county officials thought they did not have time to adequately educate voters about the purpose of use taxes. Burger said since Scott County will need to hold another vote on use taxes in the next two years, county officials will be looking at methods other places used to gain voter support for their measures and "taking notes."

A use tax also was rejected in Stoddard County in April. In cities and counties where use taxes successfully have passed, civic organizations and chambers of commerce often have rallied behind local government officials, calling for fairness and support for local businesses.

eragan@semissourian.com

388-3627

Pertinent address:

1 Barton Square, Jackson, Mo.

131 S. Winchester St., Benton, Mo.