Rep. Jeff Farnan

Car buyers would pay their sales tax at the dealership rather than a Department of Revenue (DOR) fee office under a piece of legislation given initial approval this week by the Missouri House of Representatives. With a first-round voice vote, lawmakers approved the bill that would streamline the process for consumers and help eliminate approximately 90 percent of the temporary tag abuse seen in the state.

HB 415 simply states that licensed motor vehicle dealers would collect and remit sales tax on all motor vehicles sold. The sponsor noted that vehicle sales tax is the only sales tax not collected at the point of sale. He said his legislation would put Missouri in line with the other 47 states who require dealerships to collect the vehicle sales tax.

The sponsor said the bill will not only simplify the process, but will also allow car buyers the option to roll the sales tax into their financing rather than write a check for the full amount. He said, “For a lot of folks that becomes a more reasonable proposition because writing a check for $2,000 to pay the sales tax is a lot more difficult than adding $30 to your payment every month.”

The bill will also help address the problem the state has seen with car buyers who utilize their temporary paper plates beyond their expiration date. Current Missouri law allows buyers to pay for their vehicle and drive off the lot with temporary plates that are good for 30 days. Many drivers skip the final step to pay their taxes and get actual plates. The bill sponsor said the state is losing tens of millions of dollars in sales tax revenue under the current system.

The bill now requires another vote in the House before moving to the Senate.

Please feel free to contact me at: 201 West Capitol Avenue, Room 201-C, Jefferson City, MO 65101; phone: 573-751-9465; email Jeff.Farnan@house.mo.gov.