Voters in numerous Mo. counties pass 'use tax'

JEFFERSON CITY, Mo. -- Lawmakers signed off Wednesday on their most recent effort to reinstate local taxes for certain vehicle purchases, a day after proposals to resume such taxes were passed by voters in several cities and counties.

State and local officials have been focused on the tax issue for about the last year, citing fears of lost jobs, business hardships for Missouri vehicle dealers and declining revenue for cities and counties.

The situation stems from a January 2012 decision by the Missouri Supreme Court, which ruled 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 from in-state retailers, and "use" taxes, which are levied on products used in Missouri but bought either from an out-of-state retailer or from an individual who does not run a business.

The high court ruled Greene County could not tax the boat and its accessories because they were not covered by the local sales tax and county voters had not approved a local use tax.

Since the court ruling, some cities and counties have sought to adopt local use taxes.

Tax proposals passed in 13 of 18 counties where it appeared on Tuesday's ballot, according to complete but unofficial results. Among those were Buchanan, Macon, Randolph and Sullivan counties, where voters rejected a use tax five months ago during the November election.

Among the counties passing the tax were Perry and Bollinger. Voters in Scott and Stoddard counties rejected it.

Mary Ellen Brennan, deputy director for the Missouri Association of Counties, said there has been education about use taxes since the court ruling.

"The county commissioners as well as the voters are really beginning to understand the need to have a local use tax in place," she said.

Tuesday's results were mixed for cities seeking voter approval of a use tax. Proposals passed in cities such as Fayette, Huntsville and Perryville. They were defeated elsewhere, such as in Belton, Camdenton, Crystal City, Dexter and Mount Vernon.

Heading into Tuesday's elections, more than 40 of Missouri's 114 counties and more than 90 of the roughly 950 municipalities had local use taxes.

Missouri lawmakers also have taken aim at reinstating the local taxes. Legislation given final approval Wednesday would levy sales tax when people title new or used vehicles, trailers, boats and outboard motors. Local governments that have not passed a use tax would need to ask voters whether to continue the sales tax. It would be required to appear on the ballot between November 2014 and November 2016.

"This rectifies a problem we are having all around our state lines, where people are able to go to another state and save on sales tax where Missouri does not get the auto sale and the tax money," said Rep. Jay Barnes, R-Jefferson City."

Last year, lawmakers passed a different proposal that was intended to reinstate local vehicle taxes. That bill was vetoed by Gov. Jay Nixon, who said counties and cities should have a voter-approved use tax if they want to tax vehicles bought from anywhere besides a Missouri dealership. Nixon's administration estimated that last year's bill would have imposed a retroactive tax on about 122,000 transactions.

House Speaker Tim Jones said the most recent measure would not apply retroactively. Instead, the legislation would reinstate the local taxes immediately upon the governor's signature. Jones, R-Eureka, said various small business owners have told him the current situation is creating a hardship and there should be a statewide response.

A spokesman for Nixon did not immediately return a call seeking comment about this year's legislation.