WHAT OTHERS SAY: Lawmakers should let veto stand, fix sales tax bill next year

Monday, September 10, 2012 | 2:35 p.m. CDT

In a May editorial that urged Gov. Jay Nixon to sign House Bill 1329, we chided lawmakers for rushing an otherwise good bill through in fewer than 24 hours as the session was coming to an end.

"The legislature makes mistakes when it rushes things," we wrote.

We were more right than we knew at the time, though the admonition should also apply to editorial writers.

The bill would have vacated a Missouri Supreme Court decision from March that said if you bought a car or boat out of state — over the Internet, for instance — that you didn't have to pay local sales taxes on the purchase unless your city or county had a separate "use tax."

Nixon, a Democrat, vetoed the bill, despite its bipartisan support.

Lawmakers will return to Jefferson City this week to consider overriding the governor's veto.

Only 39 counties in Missouri have use taxes, but before the court decision, most cities and counties were treating use taxes and sales taxes interchangeably. Until the court case, if you bought a car over the Internet from your St. Louis County home, or if you bought one at a Manchester Road car lot, you paid the same sales tax.

That was good public policy. That's why we supported the bill.

However, the bill has a clause that we (and many lawmakers) missed that makes it plainly unconstitutional. It seeks to apply the new policy retroactively, meaning if you purchased a car or boat after the March 21 court decision and didn't pay local sales tax, you will owe that money if the legislature ultimately passes the bill.

It would be unfair to the 122,000 Missourians who have purchased cars and boats since the court ruling to collect retroactive sales taxes they didn't pay, Nixon has argued to lawmakers.

He's got a point.

The Missouri Supreme Court has made it clear in a variety of decisions that laws, generally, cannot be applied retroactively.

The Missouri Budget Project, a left-leaning group that advocates for fiscal policies that help the poor and middle class, is urging lawmakers to override Nixon's veto anyway, so local governments don't lose millions in revenue they otherwise would have collected in taxes. The group, and some Republican lawmakers, suggest that a phrase in the law saying that it should be applied "to the maximum extent permissible by law," will allow governments to collect taxes going forward and ignore the retroactive portion of the proposal.

It's a conundrum. It's one that could have been avoided if lawmakers hadn't rushed through the bill, an issue that seems to come up year after year. In the final analysis, it is bad public policy to pass bills with seemingly contradictory language.

While we maintain the public policy behind House Bill 1329 is sound, Nixon is right. It makes no sense to pass a clearly unconstitutional bill that will surely be tied up in court, continuing to leave local governments without the revenue they need.

Lawmakers should come back in January, erase the retroactive section, and pass the bill with an emergency clause. While they're at it, they should apply the same sound public policy to all Internet purchases, and protect local businesses from unfair competition.

Copyright St. Louis Post-Dispatch. Reprinted with permission. Questions? Contact Opinion editor Elizabeth Conner.

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