JEFFERSON CITY, Mo. (AP) – Missouri Gov. Jay Nixon ratcheted up the pressure on lawmakers to sustain one of his vetoes Tuesday by releasing data showing that a retroactive reinstatement of local vehicle taxes would primarily hit people who bought cars from fellow Missouri residents as opposed to consumers who went to out-of-state dealers.
Nixon needs to persuade only a little over a third of legislators to vote with him when they return to the Capitol on Sept. 12 to avoid a veto override of the vehicle sales tax legislation. He’s been attempting to make his case by emphasizing the unfair nature of taxing people after the fact.
Local vehicle taxes surged to the forefront as an election-year issue after the Missouri 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 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.
Although the state use tax could be imposed on the boat and its accessories, the court ruled Greene County could not tax them because they were not covered by the local sales tax and county voters had not approved a local use tax. The ruling applied to vehicles of all types. Because person-to-person sales are subject to use tax not sales tax the decision also has been applied to deals in which people hang for-sale signs in car windows or advertise through online or newspaper classifieds.
Concerned about the financial hit to local governments and auto dealers on the state’s borders, the Legislature passed a bill in May that would have undone the Supreme Court ruling and retroactively reinstated local sales taxes on vehicles. Nixon vetoed the bill, saying counties and cities should have a voter-approved local use tax if they want to tax vehicles bought from anywhere besides a Missouri dealership.
Forty-one of Missouri’s 114 counties have a local use tax. The governor’s office has estimated that more than 90 municipalities also have a local use tax.
Legislators need a two-thirds majority vote in the House and Senate to override a veto.
Nixon sent lawmakers a letter last week warning that a veto override would result in retroactive taxes on 122,702 Missourians who bought vehicles not subject to local sales or use taxes since March 21, when the Supreme Court’s earlier ruling took effect.
Some lawmakers have nonetheless pressed for a veto override, saying a tax-break for vehicles bought in neighboring states was hurting Missouri businesses.
Nixon released more detailed data Tuesday indicating that about 108,000 of those vehicle sales subject to the retroactive tax were between individuals and that just 14,000 of those vehicles had been bought from out-of-state dealerships.
He said legislators “attempted to turn back the clock” by passing a bill reinstating local taxes on vehicles.
“That’s just plain wrong,” Nixon said. “The bottom line: This General Assembly should not circumvent Missouri voters and raise taxes on automobiles.”
House Budget Committee Chairman Ryan Silvey, who sponsored the vetoed legislation, sent Nixon a public letter Tuesday saying the governor was neglecting the calls of numerous mayors and vehicle dealers to reinstate the local taxes. He suggested that if lawmakers override the veto, governments could hold off on sending tax-due notices, allowing lawmakers to repeal the retroactive nature of the local tax legislation during their next regular session, which starts in January.
“I hereby call on you, governor, to stop using scare tactics and for once make a decision that helps businesses and cities across the state,” wrote Silvey, R-Kansas City, who is running for a Senate seat.
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