Missouri lawmakers advance sales tax break for car trade-ins
JEFFERSON CITY, Mo. (AP) — The Missouri House approved a bill Wednesday that would ensure people and businesses can continue trading in multiple vehicles to get tax breaks on new cars, despite criticism that the issue didn’t merit urgent action.
Lawmakers voted 126-21 to send the legislation to the Senate, where members are expected to take the measure up Thursday.
Previously, Department of Revenue officials allowed people to subtract the value of multiple trade-in vehicles against the cost of a replacement vehicle, then calculate the sales tax from the new car’s discounted price. But the Supreme Court ruled that state law only allows taxpayers to count the value of one vehicle, trailer or boat as a credit against the sales tax on the replacement vehicle.
Republican bill sponsor Rep. Becky Ruth told House colleagues that it they act fast, they could ensure no one misses out on the tax break. That’s because the law gives a six-month grace period before or after a new vehicle is purchased for taxpayers to claim a credit for a trade-in.
“If we wait and we do this next session, they’re not going to be able to take advantage of that credit,” she said.
Skeptics questioned why Parson called lawmakers back midyear instead of allowing them to handle the issue during their regular session, which begins in January.
The special session overlaps with the Legislature’s annual September session to consider vetoed bills, so lawmakers already planned to be in Jefferson City this week. Still, taxpayers will foot the bill for lawmakers’ roughly $120 daily per diem for any additional work days, along with the cost of extra staffing.
“Our issue has not been with the specific bill itself,” House Democratic Minority Leader Crystal Quade told reporters after the bill passed. “It’s been the fact that we’re spending tens of thousands of dollars on an issue that is not an emergency, when we have true emergencies that we should be talking about.”
Black lawmakers called on Parson to expand the special session to allow them to address gun violence in the state following a string of recent child homicides in St. Louis. Parson declined.
It’s unclear how many people and businesses, if any, have so far been impacted by the Supreme Court’s decision on vehicle sales taxes.
Revenue officials started updating their rules to come into line with the decision, but the rule change is not yet in place and “this process can be lengthy,” legislative researchers wrote in a financial analysis of the bill released Wednesday.
The Department of Revenue doesn’t have data on the exact number of multi-vehicle trade-ins each year and the dollar amount of discounts received. But of roughly 140,000 trade-ins that occur each year, the agency estimates that multi-vehicle trades account for 6%-10%, spokeswoman Anne Marie Moy said. That amounts to an estimated 8,400 to 14,000 multiple car trade-ins per year.