We were disappointed in Gov. Jay Nixon’s veto Thursday of legislation that would have reinstated local sales taxes on vehicles purchased out of state.
The decision is a blow to some car dealers who will lose sales to neighboring states and to local governments who stand to lose millions of dollars in sales tax revenues on those sales.
We hope the Legislature overrides the veto in September.
For decades, Missourians have paid state and local taxes for vehicle purchases when they register their cars, trucks, and other vehicles. But the state Supreme Court ruled earlier this year that local sales taxes cannot be levied on the purchase of vehicle, marine and trailer sales made in another state. The ruling also applies when an individual sells a vehicle to another Missouri resident according to the Associated Press.
While the court’s ruling didn’t affect local “use taxes” on out-of-state purchases, not all Missouri cities or counties have them.
In a rare bipartisan move, the Missouri Legislature overwhelmingly passed a bill in May to reverse the court’s decision. Lawmakers realized that the court’s decision put our state in a competitive disadvantage with neighboring states like Illinois where consumers on the eastern side of the state may go to save the sales tax which can be up to a thousand dollars or more on some purchases.
The Legislature also hoped to throw a lifeline to cities and counties who rely on that sales tax revenue to fund local services. According to some estimates, the court’s ruling would result in a 21 percent loss of revenue for the 75 counties — including ours — that don’t have a use tax.
Nixon said the legislation was tantamount to a new tax which should only be approved by a vote of the people. That is one way to look at it. But it’s also true that voters approved the original sales taxes a long time ago. A more practical analysis of the issue is that state lawmakers were merely reaffirming what voters already approved.
Let’s not forget one more important fact. It is an election year and no politician wants to go near anything that resembles a new tax.
But if our Republican-dominated state Legislature had the guts in an election year to reinstate a tax, our Democratic governor should have summoned the same courage.