RV ShowAmid warnings of possible lost jobs and declining revenue for cities and counties, Missouri lawmakers are making another run at reinstating local sales tax on vehicle purchases after Gov. Jay Nixon vetoed an attempt last year.

A Senate transportation committee heard testimony Wednesday (Feb. 6) on the Legislature’s most recent proposal that would allow cities and counties to impose a local sales tax on all sales of motor vehicles, trailers, boats and outboard motors but require voters to decide whether to continue levying it.

At issue is a January 2012 decision by the Missouri Supreme Court, which ruled Greene County could not charge a local sales tax on a man who bought a boat, motor and trailer from a dealer in Maryland. The court 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 an individual who does not run a business.

Although the state’s use tax could be imposed on the boat and its accessories, the high court ruled Greene County could not tax them because they were not covered by the local sales tax and county voters had not passed a local use tax.

Lawmakers sought to reverse the court ruling last year. Nixon vetoed the legislation and said counties and cities should have a voter-approved use tax if they want to tax vehicles bought from anywhere besides a Missouri dealership. The governor’s administration estimated last year’s measure would have imposed a retroactive tax on about 122,000 transactions.

Organizations representing Missouri vehicle, RV and boat dealers urged lawmakers to approve the local tax legislation.

Dan Sinclair, whose family owns vehicle dealerships in the St. Louis-area, said Illinois dealers have advertised the potential tax savings if Missouri consumers cross the Mississippi River and buy their vehicles out-of-state.

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