Email Re: out-of-state vehicle sales tax
From: Bola Akande
Sent: Saturday, September 26, 2015 2:42 PM
To: Keith Slusser
Cc: Gina Jarvis
Subject: Ways and Means Commitee Packet
Hi Keith,
The link to the article below should help explain why it is important that we consider placing this item on
the April 2016 ballot.
The actual article is also included in this email.
I have also provided a series of questions we can use to explain this to the residents. Kevin O'Keefe will
need to review this first. This was borrowed from a neighboring community that placed this on the
November 2015 ballot
This information will go out in the Ways ad Means Committee packet this coming week.
http://www.kansascity.com/news/local/article322609/Missouri-governor-signs-out-of-state-vehiclepurchase-tax-legislation.html
Local
July 5, 2013
Missouri governor signs out-of-state vehicle purchase tax legislation Some Missouri residents no longer
can gain a tax break by buying a vehicle from an out-of-state dealer or an individual with a for-sale sign
in the window.
By DAVID A. LIEB The Associated Press
JEFFERSON CITY —
Some Missouri residents no longer can gain a tax break by buying a vehicle from an out-of-state dealer
or an individual with a for-sale sign in the window.
Gov. Jay Nixon enacted a law Friday that immediately reinstates local vehicle taxes for numerous cities
and counties that have been unable to tax cars, trucks and boats since a state Supreme Court ruling
more than a year ago.
Nixon twice vetoed previous bills that sought to re-impose the local vehicle taxes. His office said in a
brief written statement that the previous bills “did not sufficiently protect Missourians’ right to vote on
tax policy” but that the most recent version “addresses these concerns by requiring a public vote in local
jurisdictions without a local use tax.”
Some Illinois vehicle dealers in the St. Louis area had targeted Missouri consumers with the prospect of
a tax break. Retailers in some other Missouri border cities also had seen more customers go elsewhere.
“We were the only state where there was an advantage for the citizens of the state to not make
purchases in the state,” said Sam Barbee, president and CEO of the Missouri Automobile Dealers
Association.
Cities and counties also had backed the legislation, because they had been losing tax revenues. But
Friday marked only a partial victory for the Missouri Municipal League. That’s because the governor also
signed a bill limiting the ability of governmental entities to restrict cellphone towers, which it had urged
him to veto.
The vehicle tax legislation is a response to a January 2012 state Supreme Court ruling. The court said
Greene County could not charge a local sales tax on a man who bought a boat from a dealer in
Maryland. The ruling 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 someone who does not run a business.
The Supreme Court said Greene County could not tax the boat because it wasn’t covered by the local
sales tax and county voters had not approved a local use tax.
The ruling had broad implications because a little less than half of Missouri’s 114 counties and most of
its municipalities had no voter-approved use tax.
The new law seeks to sidestep questions about the location and manner in which a vehicle is bought by
redefining vehicle sales taxes to apply to the act of titling vehicles. The newly defined tax kicks in
immediately. Within the next two years, local governments that did not previously have a voterapproved use tax must give voters a chance to repeal the titling sales tax for vehicles bought out of state
or from individuals.
Though legislative supporters are confident about the new approach, some attorneys have raised
concerns that the measure still could violate state constitutional provisions by imposing a local tax prior
to voter approval.
Nixon also signed bills Friday that limit the ability of cities, counties and state entities to regulate
cellphone towers.
Bill sponsors said the legislation was prompted by concerns from cellphone service providers that have
encountered a hodgepodge of local requirements as they expand their high-speed networks to
accommodate customers who use wireless devices to access the Internet.
The legislation sets deadlines for public entities to act upon applications for cellphone towers and lists
18 things they cannot do when regulating the towers.
For example, governments will be barred from evaluating cellphone tower applications based on
whether there were other possible locations or whether a company could have added its equipment to
an existing tower used by a competitor. They also will not be able to require companies to remove
existing wireless facilities as a condition of building new ones. And the bill limits the charges that
governments can pass on to wireless companies for their cost of hiring consultants.
Dan Ross, the executive director of the Missouri Municipal League, said the legislation “pretty well gives
a special deal to one industry and moves their applications to the head of the line.”
Nixon’s office said the law will expand access and improve service “through more rapid deployment of
broadband and wireless network infrastructure.”
Read more here: http://www.kansascity.com/news/local/article322609/Missouri-governor-signs-out-ofstate-vehicle-purchase-tax-legislation.html#storylink=cpy
Sample Ballot Questions
Question: Shall the City of Brentwood, 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?
•
Yes
•
No
Question: How much has the City of Brentwood, Missouri collected from 2012 to 2014?
We looked at our “Motor Vehicle Account” sales tax prior to July 2013 and compared it to sales tax after
July 2013.
This annualized difference could be attributed to out of state vehicle sales tax.
When Gina pulled these numbers, here is what she came up with:
•
•
•
•
•
2010-$298,157
2011-$333,841
2012-$282,082
2013-$307,023
2014-$350,522
Question: If the question is not placed on the ballot before November 2016, and approved by the voters,
of the City of Brentwood, Missouri, this will result in a reduction of local revenue to provide for vital
services for the CITY OF BRENTWOOD, MISSOURI, 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.”
Question: Does the City currently collect this sales tax?
No, however, prior to 2012, Brentwood residents USED TO pay City Sales Tax and Missouri Highway Use
Tax (equal to State Sales Tax) on motor vehicles bought out-of-state when licensing them.
In 2012, there was a change in legislation which required each municipality to pass a local sales tax on
out-of-state motor vehicle purchases.
Question: Who will pay this sales tax?
You will not pay this tax unless you purchase a vehicle from an out-of-state dealer, which is exempt from
local sales tax. Unlike retail purchases, motor vehicles are charged sales tax based off where you live,
not where it’s purchased.
Question: Will I pay this tax if I purchase a vehicle from an individual in another state?
Yes, just like at a dealership, you would pay the sales tax when you license the vehicle.
Question: Will I pay this tax if I purchase a boat or trailer from out-of-state?
Yes, the tax will apply to all motor vehicles, outboard motors, boats and trailers just like if
purchasing/licensing in Missouri. If purchasing a motor vehicle out-of-state and it will be used outside of
Missouri, you would NOT pay local sales tax.
Question: Why should there be a tax on out--of-state motor vehicle purchases?
Today, if a Brentwood resident purchases a vehicle from a Missouri car dealer, they must pay local sales
tax.
This means that with tax, the same car sold at the same price will cost more if purchased locally than if it
is purchased from out-of-state dealers.
This puts local dealers at a disadvantage, encouraging Brentwood residents to do business outside of
Missouri. In the end, it hurts local businesses and jobs.