Out-of-State
Motor Vehicle
Sales Tax Election
Vote Tuesday, August 2, 2016
1
What is the sales tax about?
• A Missouri Supreme Court Case (Street vs. the
Director of Revenue) in 2012, followed by
subsequent state legislation (HB 184/SB182) in
2013, required that cities without a use tax (such
as Lee’s Summit, Blue Springs, Independence and
other municipalities across the state) must
receive voter approval by November 2018 to
continue sales tax collections on purchases of
out-of-state motor vehicles, trailers, boats and
outboard motors.
Out-of-State Motor Vehicle Sales Tax Election
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What is the ballot language that
I will see on Election Day?
Question #1 on the August ballot is as follows:
• “Shall the City of Lee’s Summit, Missouri, discontinue applying and
collecting the local sales tax on the titling of motor vehicles, trailers,
boats, and outboard motors that were purchased from a source
other than a licensed Missouri dealer?
Approval of this measure will result in a reduction of local revenue
to provide for vital services for the City of Lee’s Summit; and it will
place Missouri dealers of motor vehicles, outboard motors, boats,
and trailers at a competitive disadvantage to non-Missouri dealers
of motor vehicles, outboard motors, boats, and trailers.”
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What does a “NO”
or “YES” vote mean?
• A “NO” vote allows continued collection of existing
sales taxes, does not authorize new sales taxes and
helps keep licensed Lee’s Summit care dealers
competitive with care dealers located out of state.
• A “YES” vote eliminates collection of city sales taxes on
motor vehicles, trailers, boats and outboard motors
purchased outside the state and from private
individuals, as well as reduces local revenue used to
pay for vital City of Lee’s Summit services.
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How much tax revenue is in question?
• The total Motor Vehicle sales tax received for
the City of Lee’s Summit is $4.4 million dollars
per year. The amount that is in question
depends on how many vehicles are purchased
outside of Missouri, which is not exactly
known, but is estimated at 10 to 20 percent,
or $440,000 to $880,000.
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How much city sales tax
am I currently paying?
• The city portion of the 7.725% total is 2.25%.
On a $20,000 vehicle the city’s portion would
be $450.
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Where do the collections
from the tax go?
The tax received on motor vehicle sales is directed to one of the
four specific funds that the tax was approved for:
• 1% goes to the General Fund for basic services such as public
safety and public works.
• ½ of 1 percent goes to the Transportation Fund which pays
for general maintenance of streets in the city including the
annual slurry seal and overlay program in the summer of a
given year.
• ½ of 1 percent goes to the Capital Improvements Projects
fund to pay for road projects identified in the City’s 10 year
road plan.
• ¼ of 1 percent goes to the Parks & Soils fund to fund Park
projects.
Out-of-State Motor Vehicle Sales Tax Election
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What impact does the tax have on
Lee’s Summit revenues?
• Sales tax makes up approximately 25% of the
City of Lee’s Summit’s General Revenue.
Out-of-State Motor Vehicle Sales Tax Election
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What is the City of Lee’s Summit’s
sales tax rate?
•
•
•
•
State 4.225%
County 1.25%
City 2.25%
Total 7.725%
Out-of-State Motor Vehicle Sales Tax Election
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What is the sales taxes rate I currently pay
on a vehicle purchased as a
Lee’s Summit resident?
• 7.725%
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How does the tax affect me?
• The tax only applies to you if you purchase a motor
vehicle, trailer, boat or outboard motor from out-ofstate. Similar purchases made in-state will be subject to
the local sales tax regardless of the vote on this ballot
question. In Missouri, state and local sales tax on
motor vehicles, trailers, boats and outboard motors is
collected by the Missouri Department of Revenue,
when the purchases applies for a new title for the
vehicle (a requirement for vehicle licensing.)
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Is there an impact on local dealerships?
• The existence of the tax creates a level playing
field for Missouri dealerships. If the existing
tax were to end, Missouri dealerships would
be at a competitive disadvantage with out-ofstate dealerships which would no longer be
required to collect the tax.
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For more information about the Motor Vehicle
Sales Tax Election, visit cityofLS.net
or
contact the City of Lee’s Summit at
816.969.1010.
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