After City of Sedalia voters overwhelmingly passed use tax and vehicle sales tax issues during the August 2015 election, three more local entities will have a vehicle sales tax issue on the April 5 ballot.
The Pettis County Ambulance District, the City of Windsor and the City of Smithton will all have questions on next Tuesday’s ballot, asking citizens if those entities should continue collecting sales tax on the titling of motor vehicles, trailers, boats and outboard motors that were purchased out-of-state.
“It will allow us to continue to grow and serve the people of Pettis County,” said PCAD board secretary Allan Rohrbach. “A decrease in revenue can cause a decrease somewhere else (in the budget).”
This is a local sales tax on vehicles bought out-of-state or from an individual (the law specifically states anyone who is not a licensed Missouri dealer). It is paid when the vehicle is originally licensed or you apply for a title.
These entities have this tax in place already, so it is not a new tax, but due to a recent change in Missouri law, it will expire this year if not renewed by voters.
“There was a court challenge that basically asked the question of whether this was a sales tax or a use tax, and so the Missouri legislature came back in and enacted legislation that said it was a sales tax and not a use tax, but as they did that, they said any city or county that did not have a use tax already in place would have to put it in front of the voters to see if they want to continue it as a sales tax,” City of Sedalia Finance Director Kelvin Shaw explained last year when talking to the Democrat about the city’s ballot question.
Not passing the vehicle sales tax would mean losing revenue these entities already receive. The vehicle sales tax rate would remain at the voter-approved sales tax rate for each entity, which would be a half percent for PCAD.
“How much money it will be, I don’t know how much of a loss it would be,” Rohrbach said. “It depends on how many people go across the state line. … It’s going to be a loss. On a $20,000 car, it’s about $100 on that individual car, that half percent.
“It’s not a tax increase,” he added. “It’s just allowing us to retain the tax the voters have already approved to provide annual service to the district.”
Renewing the tax would also level the playing field for local dealers of motor vehicles, outboard motors, boats and trailers. Having no out-of-state vehicle sales tax in Sedalia would possibly encourage potential vehicle-buyers to travel across state lines to save a few dollars, while taking money from the local community in the process.
“With the yes vote, and it’s a tax currently in place, it will level the playing field for all dealerships,” said Kyle Herrick, of Bryant Motors in Sedalia. “No one can go out of state, buy a vehicle, bring it back, license it in a city in Missouri and get any kind of tax benefit because they got a car out of state. It levels the playing field.
“It also generates a lot of tax revenue for the budgets we’re talking about,” he added. “It’s income they count on for road improvements, for infrastructure improvements, all those types of things. If it’s not there then it takes money from those budgets and they’ll have to find the money somewhere else.”
The out-of-state vehicle sales tax for the City of Sedalia was renewed with 523 voters (71 percent) saying yes, and 215 (29 percent) voting no in August.
“I feel we did as a committee a great job of increasing awareness about the taxes,” said Herrick, a member of Yes Yes for Sedalia, a local committee tasked with spreading information about the issue last fall. “There was a lot of education and we talked to lot of people about it. We increased the awareness of the importance of the tax and what it does for the budgets for these cities; it’s needed to help with general revenue and continue to help offer services these cities offer their citizens.
“We’re already doing it — let’s leave it in place because it’s a benefit to the cities to provide services for our citizens.”
Voters in Smithton will need to carefully read the ballot language, as the PCAD question is phrased positively, while the City of Smithton question is phrased negatively.
“(PCAD), if you want to keep the tax it is a yes vote,” Rohrbach said. “Some of the cities have used negative language that came out of the (state) statutes. (Smithton voters), in order to retain the tax, would have to vote no, so reading the ballot is going to be key for those people. They need to be conscious of what they’re reading.”
PCAD voters who want to approve retaining the district’s tax should mark “yes” on their ballot, and Windsor voters would do the same. Smithton voters who want to approve retaining the city’s tax should mark “no” on their ballot.
Nicole Cooke can be reached at 660-530-0138 or @NicoleRCooke.