Governor Nixon Was Right

In less than a month, the Missouri General Assembly will be convening in a Constitutionally mandated veto session.  As a former legislator who was part of a General Assembly who I believe holds the record for veto orverrides including  the override of the concealed carry measure, veto overrides are far and few in between.  Fact is, sometimes the vetoes can be on target.  That’s the case with the veto of House Bill 1329.

HB1329 was a response to a court case, Street v. Director of Revenue. In Street, the court found that the practice of charging sales taxes on out of state purchases such as cars was not authorized.  The result was numerous cities and counties whose citizens had not approved a local Use Tax as required by the Missouri Constitution lost the revenue from these purchases.  The  ”fix” was to have the legislature pass HB1329  which bypasses the local voters and essentially establishes a new tax on the local level.  This is wrong on so many levels and I give Governor Nixon credit for laying them  all out.

The supporters of the bill in the General Assembly will tell you that this levels the playing field, especially for car dealers in the state.  They will also tell you that the cities and counties who failed in the past to ask their voters for a local Use Tax need the funds.  They will also say that this is not a new tax since it has been collected before.  Each of these points are either wrong or misleading.

It is true that car dealers in the state might be at some disadvantage with the tax.  Most information indicates people will not go too far out of their way to save a few bucks.  It’s unfortunate that local dealers did not encourage their cities and counties to place a local Use Tax before their voters to legally even the playing field.  Going around the people is not only wrong, it’s against the Missouri Constitution.

The cities and counties who are now complaining about the “lost” revenue have no one to blame but themselves.  They have had the power all along to solve this problem.  They could have and should have asked their voters if they wanted to have a local Use Tax – but they didn’t because it was too easy to rely instead on the back door “sales tax” approach that has been determined to be illegal. Osage County asked its voters on August 7th if they wanted a local Use Tax. They said yes. Why didn’t every city and county without a Use Tax put it on the ballot in August?

As for the argument that this is not a new tax because it’s just a reinstatement of a tax that has been collected in the past  - well not really a good argument.  It might be a good argument if you are trying to renew a legal tax that the people have approved in the past but it’s not.  If you are instituting a tax that has been illegally collected in the past all you are doing is legitimizing the past illegal actions.  And in this case, doing so in a way that violates the state constitution. Worst yet, they have attempted to make it retroactive so that people who purchased and legally registered vehicles after the court decision would be sent NEW tax bills. That’s a new tax!

Governor Nixon pointed out many of these things in his veto letter. He also points out an issue with the Interstate Commerce clause in the US Constitution and double taxation.  On this issue, Governor Nixon got it right.