Missouri lawmakers working to bring back sales tax break for car trade-ins
JEFFERSON CITY, Mo. — Missouri lawmakers began a special session Monday to bring back a sales tax break for multi-vehicle trade-ins, a tax credit that residents use an estimated 14,000 times a year.
Republican Gov. Mike Parson called lawmakers back to work after the Missouri Supreme Court in June ended the sales tax break for multiple car trade-ins.
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 discounted price. But the court ruled 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.
It’s unclear how many people and businesses, including companies with large fleets, were impacted by the change.
The Department of Revenue so far has not provided the exact number of multi-vehicle trade-ins each year and the amount of discounts received. But of roughly 140,000 trade-ins that occur each year, multi-vehicle trades account for 6%-10%, spokeswoman Anne Marie Moy said in an email. That amounts to an estimated 8,400 to 14,000 multiple car trade-ins per year.
Democrats balked at Parson’s call for a special session on the tax break in light of other issues facing the state, although the special session is timed to coincide with lawmakers’ annual September session to review vetoed bills. The veto session begins Wednesday.
After a string of recent child homicides in St. Louis that drew attention to gun violence in Missouri, black lawmakers asked Parson to expand the session to allow them to address gun violence too. But Parson has said that needs to be handled during lawmakers’ regular five-month session that begins in January.
In a publicly released letter requesting that Parson cancel the special session on car sales taxes, House Democratic Minority Leader Crystal Quade wrote that “if any issue can wait until the regular legislative session in January, it’s this one.”
“If preventing more Missouri children from being murdered isn’t worthy of a special session, then calling one to enable a few people to dodge paying their full share of taxes is neither logically nor morally defensible,” Quade wrote.
Festus Republican Rep. Becky Ruth sponsored the bill to undo the Supreme Court decision. She said putting the issue off could mean several thousand more people don’t have access to the same tax break as before, and she cautioned that the change could lead to lawsuits against the state.
“If we waited to do this by the time the legislation is passed and becomes law in August of next year, now we’re talking about another 14,000 transactions,” Ruth said. “So how many more people is this going to impact?”