COLUMBIA — Columbia's legislative delegation was asked, in a letter from the Columbia City Council, to override Gov. Jay Nixon's veto of a bill that would implement a statewide use tax on vehicles purchased out of state.
House Bill 1329 sets the use tax as a replacement for local sales taxes on motor vehicles, trailers, boats and outboard motors, after the Missouri Supreme Court ruled it illegal on March 21 to collect sales tax on purchases made outside of Missouri. The bill originally passed 122-21 in the House and 32-0 in the Senate.
On July 12, Nixon vetoed the bill. In his veto letter, Nixon said the bill was unconstitutional because it would reverse the state Supreme Court's decision and force a tax on residents without letting them vote on the issue. Nixon also said he was concerned about the effect the taxes' retroactive application would have on purchasers.
The Department of Revenue estimates that 122,702 out-of-state vehicle purchases have been made since the Supreme Court ruling.
Opponents of Nixon's veto are concerned for the potential loss of revenue county governments along the state border might experience when Missouri residents travel out of state to purchase vehicles. While some counties have voted to establish use-taxes, which require purchasers to pay for using the vehicles in Missouri, HB 1329 would enact a use-tax throughout the state. The City of Columbia does not currently implement a use-tax, and the Columbia office of the Department of Revenue does not have an estimate of how many vehicles purchased out of state have been registered in Columbia.
State Rep. Chris Kelly, D-Columbia, said the bill is unconstitutional, whether it is passed or not. Kelly said the Missouri General Assembly can only give local governments the ability to implement the tax, and he will not vote to override Nixon's veto.
"If we override the veto, then it will just take longer to fix the problem," he said. "There's no advantage to voting for it. If we wait until the regular session in January, then we can work with the (Missouri) Municipal League and vehicle manufacturers to actually fix the problem."
State Rep. Stephen Webber, D-Columbia, said he believes a use-tax on out-of-state vehicle purchases is an important source of revenue for local governments. Webber said he will vote to override Nixon's veto.
"The bill will allow Columbia businesses to compete equally with states like Kansas, because as of now, the favor is tilted toward other states," he said. "To me, that is unacceptable."
Webber said the constitutionality of the bill is up to the judicial branch of Missouri government, not the General Assembly.
"Our job as the General Assembly is to help solve the problem (of missing revenue), and I think this bill helps do that," he said.
Columbia Mayor Bob McDavid said the letter from council was written after a recommendation by the Missouri Municipal League, an organization devoted to improving local government in the state. McDavid said whether the bill is unconstitutional or not is a legal issue.
"I don't like taxes either, but we have to pay for cops and firefighters," he said. "When money that can pay for basic services people want is lost, it's a problem."
The City of Columbia has no estimate of the revenue lost by lack of a use or sales tax on vehicles purchased out of state, McDavid said.
State Rep. Mary Still, D-Columbia, said the bill will be challenged in court. She believes the governor was correct to veto the bill.
"I appreciate the City of Columbia's need for resources, but I will vote to sustain the veto," she said. "We need to go back and pass a constitutional version of this bill to get it done correctly."
The General Assembly will convene for its veto session on Wednesday.