Franklin County could see significant revenue return to its coffers under a bill signed by Gov. Jay Nixon, Presiding County Commissioner John Griesheimer said Monday.
The bill allows Franklin County and other jurisdictions to once again collect sales taxes when residents buy vehicles, trailers, boats or outboard motors out of state.
Griesheimer said he supports the tax being put back in place, adding that it has already taken effect.
Most citizens will not see a tax increase because it only impacts those who buy vehicles and other items out of state, he said. The sales tax is imposed when the property is titled.
Last year, the Missouri Supreme Court ruled that counties could not collect sales taxes when vehicles are purchased out of state.
Now that the county can collect the tax revenue again, Griesheimer said he is confident employee pay raises can be given.
“That’s exactly how important this bill is,” Griesheimer said.
In recent months, there has been much publicity about poor worker morale and employee pay problems within the county.
“I’m tired of the negative crap that’s been printed,” Griesheimer said. “I want to put out something positive.”
It is difficult to say how much more revenue the county will receive as a result of the tax, he said.
Under the bill, the county will have to give voters a chance to repeal the tax no later than the November 2016 general election. The voters can elect to continue the tax or stop it from being collected.
Griesheimer said he plans on the tax going before the voters next November.
The tax only has to go up for voter approval in jurisdictions where there is not a previously approved use tax, such as in the city of Washington.
Another downside of not charging local taxes on out-of-state vehicle purchases was that it put local auto dealers at a competitive disadvantage, Griesheimer noted. For instance, Illinois dealers could entice vehicle shoppers to shop with them to avoid taxes.
But now even if someone buys a car in Illinois, a local tax must be paid when the vehicle is titled here.
The vehicle tax legislation is a response to a January 2012 state Supreme Court ruling. The court said Greene County could not charge a local sales tax on a man who bought a boat from a dealer in Maryland. The ruling 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 someone who does not run a business.
The Supreme Court said Greene County could not tax the boat because it wasn’t covered by the local sales tax and county voters had not approved a local use tax.
The ruling had broad implications because a little less than half of Missouri’s 114 counties and most of its municipalities had no voter-approved use tax.
The new law seeks to sidestep questions about the location and manner in which a vehicle is bought by redefining vehicle sales taxes to apply to the act of titling vehicles.
Though legislative supporters are confident about the new approach, some attorneys have raised concerns that the measure still could violate state constitutional provisions by imposing a local tax prior to voter approval.
The Associated Press contributed to this report.