An Extraordinary Tax Break
The Missouri Constitution says that “on extraordinary occasions” the governor may convene the General Assembly by proclamation. That happened earlier this month. The Legislature was called back into session on Sept. 9 to address a question about taxes on vehicle sales.
Lawmakers were already scheduled to be in Jefferson City that week for the annual veto session, as mandated by the constitution. The governor saw the opportunity to restore a tax break to Missourians and asked the Legislature to go to work. The extra session called by the governor added only a couple of days to each legislator’s calendar and the additional cost to taxpayers was minimal.
The veto session, which was held on Wednesday, was brief and uneventful. The governor rejected just six bills passed by the Legislature in 2019. None of these measures were so pressing that there was any attempt to override the vetoes. In the Senate, not one senator rose to defend his or her bill. If there were provisions that lawmakers felt strongly about, they seemed willing to wait until January to revisit them.
This year’s extraordinary session was prompted by a ruling from the Missouri Supreme Court that upset a long-standing practice of the Department of Revenue. Previously, Missourians were allowed to deduct the proceeds from the sale of multiple vehicles when they paid the sales tax on another vehicle purchase. So, for example, if you sold three old cars in order to raise money to buy a new car, the price of all three you sold would come off the price of the vehicle you bought. You’d only pay sales tax on the difference. In June, the court said the Department of Revenue had applied the law incorrectly, and that only one-for-one deductions were permitted.
The bill passed by the Legislature this September restores the multiple vehicle deductions that Missourians are accustomed to receiving. Once again, you will be able to deduct more than one sale or trade-in when you buy another vehicle. The deduction applies to all types of motor vehicles, as well as boats, trailers and outboard motors.
Had the governor waited for the Legislature to resolve this issue in January, untold thousands of Missourians would have paid higher taxes in the meantime. By addressing the issue now, no one will lose their tax credit. The law allows vehicle purchasers a 180-day window to claim sales tax credits, so deals made after the court’s June 25 decision are covered.
Extraordinary? Some people might say the topic we discussed during the extra session wasn’t all that important in the great scheme of things. But, when you consider that lawmakers traveled to Jefferson City from all over the state for the sole purpose of saving taxpayers money, I think that’s extraordinary, indeed.
It’s my honor to serve as your senator for the 16th District. If you have questions or need any assistance, please call my office at 573-751-5713 or log onto my webpage at https://www.senate.mo.gov/brown for more information.