Out-of-State Motor Vehicle Sales Tax Election Overview
In August 2016, a crucial vote was held regarding the sales tax on out-of-state motor vehicle purchases in Lee's Summit, Missouri. The ballot language, implications of a YES or NO vote, and the significant tax revenue at stake are detailed in this summary.
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Presentation Transcript
Out-of-State Motor Vehicle Sales Tax Election Vote Tuesday, August 2, 2016 1
What is the sales tax about? A Missouri Supreme Court Case (Street vs. the Director of Revenue) in 2012, followed by subsequent state legislation (HB 184/SB182) in 2013, required that cities without a use tax (such as Lee s Summit, Blue Springs, Independence and other municipalities across the state) must receive voter approval by November 2018to continue sales tax collections on purchases of out-of-state motor vehicles, trailers, boats and outboard motors. Out-of-State Motor Vehicle Sales Tax Election 2
What is the ballot language that I will see on Election Day? Question #1 on the August ballot is as follows: Shall the City of Lee s Summit, Missouri, discontinue applying and collecting the local sales tax on the titling of motor vehicles, trailers, boats, and outboard motors that were purchased from a source other than a licensed Missouri dealer? Approval of this measure will result in a reduction of local revenue to provide for vital services for the City of Lee s Summit; and it will place Missouri dealers of motor vehicles, outboard motors, boats, and trailers at a competitive disadvantage to non-Missouri dealers of motor vehicles, outboard motors, boats, and trailers. Out-of-State Motor Vehicle Sales Tax Election 3
What does a NO or YES vote mean? A NO vote allows continued collection of existing sales taxes, does not authorize new sales taxes and helps keep licensed Lee s Summit care dealers competitive with care dealers located out of state. A YES vote eliminates collection of city sales taxes on motor vehicles, trailers, boats and outboard motors purchased outside the state and from private individuals, as well as reduces local revenue used to pay for vital City of Lee s Summit services. Out-of-State Motor Vehicle Sales Tax Election 4
How much tax revenue is in question? The total Motor Vehicle sales tax received for the City of Lee s Summit is $4.4 million dollars per year. The amount that is in question depends on how many vehicles are purchased outside of Missouri, which is not exactly known, but is estimated at 10 to 20 percent, or $440,000 to $880,000. Out-of-State Motor Vehicle Sales Tax Election 5
How much city sales tax am I currently paying? The city portion of the 7.725% total is 2.25%. On a $20,000 vehicle the city s portion would be $450. Out-of-State Motor Vehicle Sales Tax Election 6
Where do the collections from the tax go? The tax received on motor vehicle sales is directed to one of the four specific funds that the tax was approved for: 1% goes to the General Fund for basic services such as public safety and public works. of 1 percent goes to the Transportation Fund which pays for general maintenance of streets in the city including the annual slurry seal and overlay program in the summer of a given year. of 1 percent goes to the Capital Improvements Projects fund to pay for road projects identified in the City s 10 year road plan. of 1 percent goes to the Parks & Soils fund to fund Park projects. Out-of-State Motor Vehicle Sales Tax Election 7
What impact does the tax have on Lee s Summit revenues? Sales tax makes up approximately 25% of the City of Lee s Summit s General Revenue. Out-of-State Motor Vehicle Sales Tax Election 8
What is the City of Lees Summits sales tax rate? State 4.225% County 1.25% City 2.25% Total 7.725% Out-of-State Motor Vehicle Sales Tax Election 9
What is the sales taxes rate I currently pay on a vehicle purchased as a Lee s Summit resident? 7.725% Out-of-State Motor Vehicle Sales Tax Election 10
How does the tax affect me? The tax only applies to you if you purchase a motor vehicle, trailer, boat or outboard motor from out-of- state. Similar purchases made in-state will be subject to the local sales tax regardless of the vote on this ballot question. In Missouri, state and local sales tax on motor vehicles, trailers, boats and outboard motors is collected by the Missouri Department of Revenue, when the purchases applies for a new title for the vehicle (a requirement for vehicle licensing.) Out-of-State Motor Vehicle Sales Tax Election 11
Is there an impact on local dealerships? The existence of the tax creates a level playing field for Missouri dealerships. If the existing tax were to end, Missouri dealerships would be at a competitive disadvantage with out-of- state dealerships which would no longer be required to collect the tax. Out-of-State Motor Vehicle Sales Tax Election 12
For more information about the Motor Vehicle Sales Tax Election, visit cityofLS.net or contact the City of Lee s Summit at 816.969.1010. Out-of-State Motor Vehicle Sales Tax Election 13
