Why Shopping for a Car is Cheaper Across the State Line

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KANSAS CITY, Mo. — A Supreme Court ruling means for some Missouri residents — it’s cheaper to go across state lines to buy a car.

Missouri dealerships and counties near the state line say they’re losing out. They said they support a bill to get around the ruling. But Missouri Governor Jay Nixon vetoed the bill and said an override effort by lawmakers would mean retroactive taxes for more than 122,000 car buyers.

If the veto stands, dealerships near the state line say they could lose revenue. As could cities like Lee’s Summit. If lawmakers can override it, Nixon said thousands in Missouri will have to pay what the bill calls ‘retroactive taxes’ on cars they’ve already bought.

Tom Sight, President of Bob Sight Ford and Bob Sight Independence Kia, said the Supreme Court ruling is unfair.

“There is a loophole,” he said. “And it’s where you go to Kansas, which is right across the street, buy a car over there and pay less taxes.”

The loophole Sight is talking about was created after the Supreme Court made a ruling in March. It means if you live in a Missouri city or county without a ‘use tax’ on the local books, you don’t have to pay local sales tax when buying a vehicle out of state.

“Why should you be able to go again 20 minutes across the street, buy the same type of car and come back and pay less money? It doesn’t make sense,” Sight said.

Lawmakers passed a bill to get around the ruling. On Wednesday they’ll consider overriding a veto on that bill by Governor Jay Nixon. If they do, Nixon said the more than 122,000 Missourians who’ve purchased vehicles out of state or have sold cars to another since March will get a tax bill.

“It’s just plain wrong to impose a retroactive tax on these Missourians,” Nixon said, “especially to do so without a vote of the people. Missourians deserve the opportunity to vote on these issues, and the General Assembly shouldn’t take that right away.”

Lee’s Summit City Manager Stephen Arbo said his town stands to lose $150,000 a year and a new dealership is now thinking twice about landing in Lee’s Summit.

“Before the Supreme Court ruling, basically, there was a fair playing field where everybody competed on an equal basis for the cost of a vehicle, and the Supreme Court ruling — I don’t think it was their intention, but they made a definite advantage to the Kansas dealerships,” Arbo said.

Lawmakers are expected to take up the issue in Jefferson City on Wednesday.



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