The House passed two bills this week that will help Missourians regarding the taxes they pay on vehicles. One would address a years-old issue regarding temporary license tags. The other would stem the hiking of property taxes on vehicles that are getting older with increasing mileage.
House Bill 415 could at last cut off the displaying by drivers of expired temporary tags – something that has been an issue in Missouri for years. It would require dealerships to collect sales tax at the time of a vehicle purchase, either as a lump sum or by rolling the tax into the financed amount. House Bill 713 would lay out how vehicles’ assessed valuations would be determined, replacing a system that has allowed property tax increases in the last two years.
St. Louis Republican Michael O’Donnell carries HB 415, which he says is the latest step in addressing the temporary tag issue. Under previous action by the General Assembly a new computer system is coming to the Department of Revenue that will allow the collection of sales tax by dealers. This bill would allow for its use beginning in January.
He said the bill could also make car and truck purchases easier for Missourians by addressing what can now be a significant up-front cost.
Bipartisan backing gave the bill a 155-1 vote on its way to the Senate. Democrats including Peter Merideth (St. Louis) said it would be a fix that is “important,” and “overdue.”
“I actually hear more from constituents about this than many other things, strangely – about the expired tags, and frequently have to have the conversation with them that the main problem in Missouri is that we aren’t requiring dealers to collect the sales tax at the time of sale,” said Merideth. “So folks, either intentionally or not intentionally find themselves not getting their taxes paid and their licenses ready.”
O’Donnell said the passage of this legislation could eliminate “90%” of “temp tag abuse” in Missouri, and noted that 47 other states already allow dealers to collect tax at the time of the sale.
The sponsor of HB 713, Rodger Reedy (R-Windsor) explained that each year Missouri assessors use the October edition of the National Automobile Dealers’ Association (NADA) Used Car Guide to determine the values of the vehicles on which Missourians pay property taxes. HB 713 would replace that with a system that begins with the original suggested retail price (MSRP) of each vehicle from when it was new, and apply a depreciation schedule for each year of its age up to 15 years. After that its value would be assessed at one-tenth of one percent.
Reedy said the old system’s flaws were made obvious in the wake of the COVID pandemic.
“In 2021 and ’22, due to used care values going up, our constituents and citizens had higher tax assessments and therefore paid higher taxes,” said Reedy. “When those values went up, there’s no provision for rollbacks on personal property, and when that happened our taxpayers just got a taxing increase and I’ve talked to several members [who have said] that that’s been a really big issue as they’ve talked to their constituents.”
That measure advanced to the Senate on the strength of a 150-0 vote.