February 7, 2016

For 2nd straight year, Governor vetoes use tax restoration legislation

Governor Jay Nixon has vetoed a bill meant to eliminate the issue of taxes not being collected on vehicles purchased out-of-state.

Governor Jay Nixon

Governor Jay Nixon

Senate Bill 182 sponsored by Senator Mike Kehoe (R-Jefferson City) would have eliminated both state and local use taxes on those vehicles and replaced it with a sales tax for the titling of them. Local voters would have the opportunity to vote whether to discontinue sales tax collections on titling.

Nixon says the bill would not have allowed voters to repeal the tax on private sales. In his statement, he says, “Denying the voters the ability to be heard on the entire scope of this tax is unacceptable requires my disapproval.”

Nixon also says if voters repeal the local sales tax on out-of-state and private transactions, it would also repeal the local sales tax on ALL vehicle transactions. He says that would hurt the ability of local jurisdictions to fund and perform necessary services.

See the release on the Governor’s website.

The Governor last year vetoed another bill that also sought to address the out-of-state vehicle sales tax issue. He said that legislation would have applied a tax retroactively to purchases made before it went into effect but after a 2012 Supreme Court ruling that invalidated local taxes on those transactions. That provision was removed in SB 182.