According to a press release form the Missouri Association of Counties, the Missouri Supreme Court ruled that local sales taxes cannot be levied on out-of-state purchases of motor vehicles, trailers, boats and motors. Prior to the ruling, the Department of Revenue collected state sales taxes at the time of registration. The ruling also applies to sales between individuals, according to the press release.
Presiding Stoddard County Commissioner Greg Mathis said he had just learned of the ruling. He said he did not know what impact this would have on the county.
Carlin Bennett, presiding commissioner in Mississippi County, said the Supreme Court case was a result of action by Craig A. Street, who went to Maryland to buy a boat, outboard motor and trailer which he then brought back to his home in Greene County, Mo.
During registration, the Missouri Department of Revenue charged him $100 on the boat, $78.75 on the motor and $12.44 on the trailer in local sales tax.
When the Administrative Hearing Commission denied his request for a refund of these local taxes, Street filed a petition with the Missouri Supreme Court.
While the Missouri Supreme Court agreed with the AHC's argument that local governments can impose sales tax to the same extent as the state, the Court ruled that The Missouri General Assembly did not intend the motor vehicle tax be applied to purchases made out of state. The Court said a use tax would apply to out-of-state purchases for vehicles, trailers, boats and motors.
He predicted "a hue and cry" will be raised by area car dealers once it sinks it what has occurred. "It won't take long," Bennett said.
Bennett said he was advised by someone at the local license bureau that the ruling also applies to motor vehicle transactions between members of the public.
"If I buy a car from a dealer in Missouri is the only time I have to pay city and county taxes," he said. The purchaser will still be paying state sales tax, Bennett noted.
The ruling will make things hard financially on local governments located near the state border, he said.
"We hope people will continue to support the local place where they live," Bennett said.
Bennett said the only hope for the county is action by the Legislature which would take some time.
Dexter City Administrator Mark Stidham said he had not been informed of the Court ruling. He said the ruling would be a setback for local revenue generated from sales taxes.
Stidham said that Dexter does not have a use tax. He said the city proposed a use tax in 2002 or 2003, but it failed when voted on by the public. He said people who buy merchandise online using their computer, do not pay a sales tax. He noted that more people are buying online, and that is not fair to the local businesses who do have to pay sales taxes. He said local businesses have employees and pay real estate taxes, and because of this they have more overhead. He said a use tax is the fairest way for the city to obtain tax revenue.
Dunklin County Commissioner Don Collins said he is roughly estimating that the change in vehicle sales taxes would cost the County $200,000 for the year.
"We're still trying to refine it, but it is hard to tell how many of these vehicles are being bought out of state or through individuals," Collins said. "If the use tax should happen to not pass, we have to find somewhere else to raise this money because we have already budgeted for it."
Collins said Dunklin County is putting a use tax on the ballot.
Scott Welton with the Sikeston Standard Democrat and George Anderson with the Dunklin Democrat contributed to this story.