Four local taxing entities to put special use tax on April ballot

In the meantime, State Senator Mike Kehoe has introduced a bill into the state legislature that would do away with all such local special use taxes on motorized vehicles in favor of one statewide tax

Earlier this month four separate taxing bodies in the Lake Area agreed to place a question on the April 2 election ballot asking voters to approve a special use tax on motorized vehicles purchased out-of-state.

Then last week State Senator Mike Kehoe, R-Jefferson City, introduced a bill that would do away with all such local taxes on out-of-state purchases and set one statewide sales tax on motorized vehicles no matter where the purchase was made.

On Jan. 23, Kehoe introduced Senate Bill 183 which in part reads, “Notwithstanding any other provision of law to the contrary the local sales tax hall be imposed on all sales, both at retail and any other sale, of motor vehicles, trailers, boats, and outboard motors, regardless of whether the sale of such motor vehicles, trailers, boats and outboard motors occurred within the state of Missouri or in any other state…”

The local entities that have placed the special use tax question on the April ballot include the cities of Osage Beach and Camdenton and both Morgan and Camden counties.

In those four jurisdictions, the special use sales tax would only apply to purchases of motorized vehicles, in excess of $2,000 annually, that were made out of state then brought back into the jurisdiction to be titled and licensed.

In both instances, officials are attempting to overcome a loss of revenue suffered by local taxing bodies after a Missouri Supreme Court ruling on Jan. 31, 2012 made it illegal to impose a special use tax on motorized vehicles purchased from out-of-state vendors. The court reasoned that the tax could not be imposed unless the special use tax was first approved by the voters within each of the various taxing jurisdictions around the state

During the 2012 spring session of the Missouri General Assembly, Kehoe introduced, and the legislature passed, a bill restoring the special use tax restoring the tax that the Supreme Court had taken away, however Governor Jay Nixon vetoed that bill and legislators did not attempt to override the veto during the fall session.

Kehoe said he introduced last year’s bill after hearing a large number of complaints from automobile and boat dealers, especially in bordering counties such as St. Louis and Kansas City, that they were losing customers to out-of-state dealers.

Since the Supreme Court ruling, however, a number of counties and cities around Missouri have put the issue up for vote. For instance, the City of Laurie placed a special use tax measure on the November ballot, however it was voted down.

Some taxing entities in the state, for instance Miller County, already had a voter-approved special use tax on out-of-state purchases and were not affected by the Supreme Court ruling.

However, that was not true of the Lake Area entities mentioned above. Those taxing bodies, Osage Beach, Camdenton, Morgan County and Camden County, have each placed a question on the April 2 ballot asking voters to approve the imposition of a special use tax on the out-of-state purchase that is equal to the sales tax already charged on motorized vehicles purchased within each of those jurisdictions.

Which means, that if the measures pass, anyone who purchases a motorized vehicle from an out-of-state vendor for a price in excess of $2,000 and brings it back into the jurisdiction will have to pay the special use tax before the vehicle can be titled and licensed.

In Osage Beach and Camdenton the tax would amount to a two-percent charge on the overall purchase price, while in Morgan County the tax would be set at 1.5 percent of the total purchase price and in Camden County the special use tax rate would be 1.25 percent of the total purchase price.

Under the terms of the legislation Kehoe introduced last week, those local special use taxes would be dropped and buyers of motorized vehicles across the state would all pay the same sales tax percentage regardless no matter where the vehicle was purchased.

Kehoe’s bill is equipped with an emergency clause, which means if it is passed by a majority of both houses of the General Assembly it would become law immediately rather than on Aug. 28 as does most newly passed legislation.

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