The Missouri House has passed legislation aiming to allow people to keep getting multiple tax breaks when trading in more than one vehicle on a new one.
The chamber’s Republicans say the language of House Bill 1 will allow Missourians to keep doing what they’ve been doing and say it will help all consumers. Many House Democrats voted for the bill, though some in that caucus decried it as “corporate welfare” and said it was a topic unworthy of a special session.
The House voted today, 126-21, to send the bill to the Senate.
Governor Mike Parson (R) called a special session to coincide with today’s annual veto session to deal with the issue in response to a Missouri Supreme Court ruling in June. The Court said state law allows a tax break to be awarded only on one vehicle, when multiple vehicles are traded in toward a new one.
Sponsor Becky Ruth (R-Festus) said her bill will give much-needed tax relief to Missourians from all walks of life.
“A young mother who is trying … maybe she’s got two cars that don’t run well and she’s trying to upgrade to a good, dependable car to take her child to school; to get to work herself. This impacts someone that may have lost their spouse and they need to trade in those two cars to be able to get a good, reliable car. This impacts senior citizens who are trying to downsize. This impacts just normal, everyday working people,” said Ruth.
Shrewsbury Democrat Sarah Unsicker agreed the bill will affect some individuals, but said it will also let corporations keep from paying their “fair share.”
“There are approximately 14-thousand vehicle sales estimated to be impacted by this bill. The Department of Revenue cannot estimate how much this tax credit costs the state or how many vehicles are commercial sales,” said Unsicker. “If we make this just about individuals like those the sponsor referenced I would support this bill. However, I believe this bill is, to a substantial extent, corporate welfare, and therefore I will be voting against it.”
An amendment that would have made the tax credit available only to individuals and businesses of 12 or fewer employees was voted down.
Democrats argued that the tax credit issue was not pressing and did not merit the calling of a special session.
“This Supreme Court Decision didn’t just help us figure out, this summer, that this was an issue. Since 2008 there have been 17 administrative hearings to ask this question of whether folks are allowed to trade in multiple cars to offset the car they buy. In all 17 administrative hearings they found they couldn’t,” said St. Louis representative Peter Merideth (D). “Regular people, regular folks were being told they couldn’t claim this credit, but we didn’t consider it an emergency.”
Ruth argued that the law needed to be clarified, and addressing it in a special session makes sure no eligible vehicle trades will happen without the award of tax credits, thanks to a window of 180 days before or after a new vehicle purchase in which to offset the owed sales tax.
“If you’re one of those people since the Supreme Court decision on June 25, 2019, that’s trying to figure this out … if we do this now, those folks are still going to be able to take advantage of that credit. If we wait and we do this next session they’re not going to be able to take advantage of that credit,” said Ruth. “The people that come before them, the people that come after them, will, and this could possibly set our state up for lawsuits.”
Ruth calls the legislation is a way to keep Missouri law consistent.
“The problem that I have with that is the ‘business as usual’ that we’ve been doing has been established by the Supreme Court to be against the law,” said Kansas City representative Ingrid Burnett (D). “Rather than take to task the [Department of Revenue], who has been breaking the law, we have decided to call a special session to come here to change the law.”
House Democrats said lawmakers’ time would have been better spent debating changes to gun laws, and several among them filed proposals to that end.
They also wanted to see attention given to Medicaid enrollment. House Minority Leader Crystal Quade (D-Springfield) said Missourians with life-threatening medical conditions are losing coverage.
House Speaker Elijah Haahr (R-Springfield) said any time a special session is called people will point to other issues it could have dealt with.
“That’s not really my decision. If the governor thinks it’s important … we were coming up here anyway for the veto session. It’s an issue that we could work on. It’s an issue that, as you saw, had pretty broad support,” said Haahr.
Haahr said he has asked members of his caucus to research what some other cities in the nation have done to reduce violent crime, with the aim of preparing a legislative proposal for the regular session that begins in January.
As for Medicaid enrollment, Haahr said decreases in enrollment are due to factors including an improved economy and changes in 2016 to the Affordable Care Act (ACA); and a review of Medicaid eligibility that has seen ineligible recipients being taken off the program’s rolls. He said if a need for hearings on the issue is presented to him, he will call for them.