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Missouri Municipal League on failure, future of out-of-state vehicle sales tax

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One of the organizations that helped develop and supported HB 1329 in the last legislative session says it will try another piece of legislation in the 2013 session.

The Missouri Municipal League expects another bill dealing with sales tax collection on vehicle purchases to be put before the Missouri legislature in 2013.

Deputy Director Richard Sheets of the Missouri Municipal League says its attorneys helped craft 1329, which would have allowed local governments to resume collection of sales taxes on vehicles purchased from private Missourians or out-of-state dealers. The bill was created after a Supreme Court ruling in March that such collection was unconstitutional.

It had strong bipartisan support and was passed by veto-proof margins in the session, but was vetoed by Governor Jay Nixon. The House didn’t bring the bill up to attempt a veto overturn, with Republican leadership saying it didn’t have enough support from the Democratic caucus.

Governor Nixon in recent weeks highlighted that overturning his veto would mean more than 122 thousand Missourians would retroactively owe taxes on vehicle purchases made since the Court’s ruling. That alarmed many lawmakers who had supported the bill before, and was seen as likely grounds for a court challenge over the bill’s constitutionality.

Sheets says the issue of retroactively was considered by MML’s attorneys when they were creating the language. “Their thought was to make this seamless in order to show that this was … had always been the intent of the legislature. That really was our point in this. This was not a new tax, this was not a new feature of our sales tax … that was the intent of the statute when it was written.”

Sheets anticipates another bill to be offered in the 2013 legislative session, taking into account the concerns over retroactively.

He says without those tax collections, local governments are suffering from the loss of a revenue stream they have enjoyed for decades. Enactment of use taxes at the local level can address that concern, but Sheets thinks the issue must still be addressed legislatively.

“Our problem is this was a tax that should never have gone away … this was included in the sales tax when the voters voted on this. We just think that there’s a lot of problems with this whole thing.”

Republicans have criticized Governor Nixon for not becoming involved in the development of the bill prior to vetoing it, but Sheets says the League met with the Governor on several occasions while it was being developed.

“The Governor really understood the issue and wanted to work with us and we met with the Governor, but he just could not get past thinking that another vote was necessary and we really disagreed with the Governor in that respect.

Sheets expects to work with Nixon again in creating a new bill.

Legislature overrides contraception insurance bill, doesn’t take up car tax bill

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The Missouri legislature has overridden Governor Jay Nixon’s veto of Senate Bill 749, legislation meant to allow individuals and employers to opt out of insurance coverage for abortion, birth control and sterilization. The Senate voted 26-6 for the override, the House had just enough votes for the necessary two-thirds majority, 109-45.

House Republicans hold a press conference following the adjournment of the annual veto session, led by new House Speaker, Tim Jones (at podium).

In debate in the House, three Democrat women spoke against the override. One of them, Stacey Newman (D-St. Louis), said the bill was not about religion. “Senate Bill 749 is actually about birth control. I also want to remind you what birth control is and what it means to women in Missouri. Birth control determines every woman’s social, their economic and their political equality. Every single woman.”

Representative Linda Black (D-Bonne Terre) noted her conservative record and pro-life beliefs when she spoke against the override. “I believe that the life blood starts at conception and that God protects that through the entire process and that we as human beings and citizens do everything to prevent abortions, but Mr. Speaker I don’t believe that this bill, in my heart, will prevent abortions. I think if we cut off the contraception to women, we’re going to create more abortions and I would never vote for anything that would create that possibility.”

Representative Tim Jones (R-Eureka), who was voted Speaker in the beginning of the veto session, said the issue was tied to the Affordable Care Act. “Senate Bill 749 was an effort to address some of those problems inherent in that bill. I credit Senator (John) Lamping with having the vision and the foresight to recognize that issue early on in the last session and to move that bill skillfully over to us in the House … it’s become more important than ever, because of the Supreme Court upholding Obamacare, that we work to protect the religious freedom, liberties, conscience rights and more importantly, the business decisions of Missouri’s small business owners from this massive federal intrusion.”

The bill is already the subject of a lawsuit filed this afternoon in Cole County Circuit Court, that says the law files both state and federal law including the Affordable Care Act, the Employee Retirement Income Security Act, separation of church and state and Missouri employment discrimination statute.

This is the 24th veto override in the state’s history and the second in as many years, after the legislature last year overturned Governor Nixon’s veto of a bill establishing new congressional districts.

Vehicle sales tax issue to return in 2013 legislative session

The House did not take up HB 1329 to attempt to override that veto. Jones said in a morning press conference that there was “great concern” in his caucus about the bill, much of it stemming from the issue raised by the Governor of taxes being collected retroactively on more than 122,000 vehicle purchases made by Missourians from other Missourians, privately, or from out-of-state dealers.

Jones blamed the Governor for the legislation having flaws that resulted in the veto and discouraged lawmakers from voting to override that veto. “Our governor was absent from all policy discussion during the legislative session, and instead of weighing in in a timely fashion and offering a solution and offering leadership on the issue, he decided to veto the bill.”

Jones says he would support a special session to deal with that issue. Governor Nixon says that won’t happen.

House Democrat leader offers veto session predictions

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House Republicans could attempt overrides of several vetoes by Governor Jay Nixon, but two issues are expected to be at the forefront of today’s veto session.

House Minority Floor Leader Mike Talboy (D-Kansas City)

Republicans will have to start in the Senate to attempt an overturn of Senate Bill 749, to allow employers and individuals to opt out of insurance coverage for contraception, abortion and sterilization. House Minority Floor Leader Mike Talboy (D-Kansas City) says that veto will be tough to sustain.

“I think that if you look at the vote total, and if you look at the makeup of certain districts that some of our folks represent, I think that one is going to be the much tougher of the two to do.”

Talboy says Republicans will have a much harder time finding the votes to overturn the veto of HB 1329, to allow sales tax collections on vehicle purchases made out of state or from private Missourians.

“I know that there are some Democrats that, for their area, feel that it is vitally important. However unless you get to a 95, 96, 97-type area with the Republican votes, I don’t know that there are enough Democratic votes to even come close to anything there.”

A two-thirds majority, 109 votes, is necessary to overturn a veto in the House. When the bill passed in May it received 122 “yes” votes. 44 of those were from Democrats, but 16 Republicans voted against it.

Some lawmakers say enough Democrats might switch their vote to side with the Governor to fall short of the veto override. Or, they say Governor Nixon might have swayed enough lawmakers by saying more than 122 thousand Missourians will retroactively owe taxes on vehicle purchases made since March if the veto is overturned.

Talboy says the Governor’s office has been contacting members of his caucus. “As far as how many of them have had in-depth discussions, no I don’t know how many of those folks were there, but I know they’ve called me asking where I am and then kind of giving me the pitch on why they feel that it is important to veto and important to sustain the veto.”

The Kansas City Star reports one House Democrat was recently targeted in a mailer paid for by a nonprofit organization funded by the Democratic Governors Association, America Works USA, for supporting the bill in May. Representative Genise Montecillo (D-St. Louis) and 19 Republicans were the subjects of mailers.

Talboy says that hasn’t been popular among House Democrats. “That has caused some consternation in our caucus … but as far as whether or not it’s going to make any difference moving forward on this bill, I don’t think anybody that got the mailer changed their mind based upon it.”

Nixon again urges against veto override of bill allowing tax on out-of-state vehicle purchases (VIDEO/AUDIO)

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With the veto session a week away, Governor Jay Nixon continues to make his case that the legislature should not overturn his veto of HB 1329, a bill to allow the collection of sales taxes on vehicle purchases made out-of-state.

Click the image to view a video of Nixon’s media conference.

Nixon says of the more than 122 thousand Missourians that will face a retroactive tax bill if his veto is overturned, about 14,000 bought a vehicle from an out-of-state dealer. More than 108,000 were private transactions.

He says the issue is less about out-of-state vehicle purchases than it has been portrayed to be. “I felt like in the public there was this sense that those were all dealer or out-of-state, and when you see 89 percent this way, I wanted to get these facts out.”

The House sponsor of HB 1329, Representative Ryan Silvey (R-Kansas City), says 14,000 is still a large number of purchases. “If you’re okay with incentivizing 14,000 people to cross state lines to make the second largest purchase next to their house, then I guess it’s not a big deal, but as far as the legislature’s concerned it’s a big deal.”

Nixon says the passage of a use tax should be left to local jurisdictions to decide. “This is something that has been passed since the end of the legislative session in at least two jurisdictions … running around the voters for any tax, much less a retroactive one … to run around the voters, to say that you can go back and collect a tax for something that the court said was not taxable seems to be not good public policy, not good fiscal policy and as I said before, I just don’t think it’s right.”

Silvey says the issue is one of parity at the state level, and needs to be addressed at the state level. “Because of the way the court decision yanked these taxes out, the way that they were being collected, to have all 522 municipalities, all 114 counties try to address it piecemeal, then you end up with small inequities everywhere around the state. It makes much more sense just to take care of it the way we’ve chosen to take care of it, which is just to put it right back to the status quo. Nothing changes after this bill from before the (Supreme) Court decision. It’s the way it’s been for the last sixty years.”

Representative Ryan Silvey (R-Kansas City)

Silvey says if the legislature does override Nixon’s veto and the Department of Revenue holds off on issuing tax due notices, lawmakers could then strip the retroactive component from the law in the next legislative session. “I’ve spoken with members of the Senate. Senator Kehoe is willing to file the legislation if I’m not there to file it myself next year.” Silvey is seeking election to the Senate in November.

Silvey says that would be preferable to letting the veto stand, while more out-of-state vehicle purchases are made.

Nixon says overriding the veto on HB 1329 could just set up another lawsuit similar to the one the Supreme Court ruled on in March. “Nothing in this bill would fundamentally change the underlying legal theory of this: that people need to vote if you’re going to have a raise in taxes.”

Silvey accuses the governor of playing politics with the issue. “If the governor really had substantive policy issues with this, he should have helped us address it during session. He should have worked with us to find a solution instead of waiting for us to go home, issuing a veto and then deciding to hold press conferences 60 days before a General Election.”

The veto session is a week from today.

AUDIO:  Hear Mike Lear’s interview with Ryan Silvey, 5:48