03/13/2013 1 Comment
For those Missourians contemplating buying or selling a motor vehicle to another person, the purchase of that vehicle just became more expensive. On February 18, 2013 the Missouri Senate passed Senate Bill 182, a bill regarding levying a local sales tax on all motor vehicles sales.
SB 182 stops counties and municipalities from collecting a local use tax on the sale of motor vehicles, trailers, boats, or outboard motors. Instead of a use tax, local government entities will impose a local sales tax on the sale of all of the aforementioned items, regardless of whether they were purchased in Missouri. The home address of the buyer is used in determining what local tax rates apply.
The total sales tax for motor vehicles, trailers, boats, or outboard motors sold at retail is the sum of the state sales tax (4.225%) plus the local sales tax (varies according to locality). The sales tax for all non-retail sales of the preceding items is the sum of the state highway use tax (4.00%) plus the local sales tax (varies according to locality).
All counties and municipalities that did not previously approve a local use tax must put to a vote of the people whether to discontinue collecting sales tax on non-retail sales of motor vehicles. If a local government does not hold such a vote before November 2016, the taxing jurisdiction must stop collecting the sales tax. Counties or cities may at any time hold a vote to repeal the tax. Language repealing the tax must also be put to a vote of the people any time 15% of the registered voters in a taxing jurisdiction sign a petition requesting such.
Why did the Missouri Senate pass this bill?
Quotes from several state and local elected government officials, business advocacy organizations, and local car dealers in a Southeast Missourian article titled “Sales tax fallout hits dealers, others” dated February 21, 2013, stated a “level playing field” is needed between the car dealers in Illinois and Missouri. Whenever officials allude to fairness, bad things happen. One can conclude these officials support a statist approach to concentrating economic controls in the hands of the government. Being “fair” to all car dealers in Missouri can encourage an overall centralization of economic control at the state level.
The proper role of government is to protect equal rights, not provide equal things. This bill violates the rights of local governments by intruding upon the taxing authority a local government has with its citizenry. The state senators want to dictate to locally elected officials of Missouri how to run their communities. This is a huge usurpation of power of the state from the counties and cities.
Each local government in Missouri has made a social contract with its citizens. The contract provides for public order, protection of property, and access to public services such as highways, roads, and sewer. The citizens and their local governments determine the limiting of rights and the duties of each other. The Missouri Senate overstepped its authority by directing local governments to collect sales tax on the purchase of vehicles without a vote of the people at the local level. Although there is a requirement to put the measure on the ballot of counties and municipalities that did not have a use tax prior to the passage of SB 182, it is a deep-rooted “Principle of Liberty” to get voter approval before imposition of a new tax. The Senate’s action in regards to the SB 182 smacks of governing at their whim rather than by law.
Even though SB 182 has passed in the Senate, the bill must go to the House. The Senate and House need to agree to the final language of the bill before sending it to the governor for his signature. The governor can veto the bill or sign it into law. But that is not the end of it. At any time, with 15% of the registered voter in a taxing authority’s jurisdiction signing a petition to put it on a ballot, the voters can nullify the tax.
It is time we send a strong message to the Missouri Senate by directing our local elected officials and our state representatives to kill this power- grabbing bill before rather than after it becomes law.