June 13th, 2017
NOT A New Tax!!
In January of 2012, the Missouri Supreme Court issued the “Street Decision” creating a loophole in the Missouri sales tax laws allowing vehicles purchased out of state or from an individual to be excluded from the local sales tax. In 2013, the Missouri Legislature provided municipalities with temporary relief from the tax loophole. The legislature re-imposed the local sales tax on out-of-state vehicle purchases along with person-to-person sales, but required that cities must receive voter approval to keep the loophole closed by November of 2018, or the City’s portion of the tax will terminate.
In summary, this is what it means to Carthage:
• Carthage residents currently pay city sales tax and on vehicles bought out of state when we license them
• A 2012 change in the interpretation of the law changed everything. Now voters must approve continuing the motor vehicle sale tax
• Carthage relies on these tax dollars for basic services like street and sewer maintenance and police and fire protection
• Carthage depends on this important revenue source which in the past is approximately $63,000 to $75,000 annually
• Carthage auto dealers will be at a competitive disadvantage to out-of-state businesses, who don’t charge sales tax on our vehicle purchases. These out of state businesses don’t create local jobs or reinvest in our community. It’s not wise that tax breaks encourage Carthage residents to leave Missouri to make large purchases.
• If the voters do not approve continuing the sales tax on motor vehicle sales, private vehicle sales will no longer be subject to the local sales taxes, however the state sales tax will still apply
On Tuesday, August 8, 2017, the voters of Carthage will have the opportunity to vote on this issue. It is important for all citizens in Carthage that the City continue to collect this revenue. The Chamber supports to continue application of the local sales tax to the titling of motor vehicles, trailers, boats, and outboard motors that are subject to state sales tax under section 144.020 and purchased from a source other than a licensed Missouri dealer.