HCS HB 703 -- MOTOR VEHICLE FEES AND TAXES

SPONSOR:  Jones (89)

COMMITTEE ACTION:  Voted "do pass" by the Special Committee on
General Laws by a vote of 12 to 2.

Beginning January 1, 2012, this substitute allows motor vehicle
and boat dealers to act as fee agents for the Department of
Revenue to register and license motor vehicles and trailers; to
title and register boats, vessels, and outboard motors; and to
collect sales and use taxes on motor vehicles and boats at the
time of the initial sale or lease.  Any dealer who elects to
collect the sales and use tax must file a return and remit the
tax collected, less a 2% timely filing deduction, to the
Department of Revenue.  Penalties will be imposed for late
filing, and the department can electronically survey all motor
vehicle dealer accounts to determine if payments have been timely
remitted.  The sales tax imposed on a used vehicle, trailer,
boat, or motor will be at least 80% of the average trade-in value
as determined by the current volume of the National Automobile
Dealers Association's Official Used Car Guide, Central Edition,
regardless of the purchase price.

A motor vehicle dealer is allowed to charge an administrative fee
of up to $150 in connection with the sale or lease of a new or
used motor vehicle for the storage of documents or any other
administrative or clerical services.  The fee will be annually
adjusted for inflation based on the federal Consumer Price Index.
The fee may result in a profit for the dealer, and the amount of
the fee must be disclosed on any preliminary worksheet or
contract which is required to include a written notice
conspicuously set out from the surrounding written material
regarding the fee.

Any actions by a court or jury in this state to award or impose
damages upon a motor vehicle dealer based on the charging of an
administrative fee when the dealer is in compliance with the
substitute will be null and void.  If the courts rule that
administrative fees charged in compliance with this section are
the unauthorized practice or business of law, no person who paid
an administrative fee may recover the fee or damages and no
person who charged the fee will be guilty of a misdemeanor as
provided in Section 484.020, RSMo.

FISCAL NOTE:  Estimated Cost on General Revenue Fund of $0 in
FY 2010, $0 in FY 2011, and More than $100,000 in FY 2012.
Estimated Income on Other State Funds of $0 in FY 2010, $0 in
FY 2011, and More than $100,000 in FY 2012.

PROPONENTS:  Supporters say that the bill allows auto dealers to
set up financing for car loans in the same manner as 46 other
states.  Finance companies will actually collect tax revenues and
remit proceeds immediately to the Department of Revenue.
Missouri will collect a greater amount of sales tax revenue using
this system.

Testifying for the bill were Representative Jones (89); Missouri
Automobile Dealers Association; and Missouri Bankers Association.

OPPONENTS:  Those who oppose the bill say that small dealerships
might not be able to set up financing, and therefore, would be at
a disadvantage when dealing with customers.  The bill is the
first step in making financing and tax collecting mandatory for
small car dealers.  Software to implement these programs is very
expensive, and customers prefer the option of paying taxes
themselves.

Testifying against the bill were Don Strada, Powersport Dealers
Association of Missouri; Craig Silvers; Wayne Cash; and Lawrence
Neill.

OTHERS:  Others testifying on the bill say that the opt-in
provision for dealers is a good idea.  The bill may help Missouri
collect more tax revenue.  The enforcement of the bill and the
mailing of license plates to dealers or individuals might be
expensive.  Allowing motor vehicle and boat dealers to act as fee
agents might reduce fee office revenues for the non-profit and
charitable organizations and political subdivisions which the
legislature is currently considering giving preference in fee
office contract awards.

Testifying on the bill was Department of Revenue.

Missouri House of Representatives
95th General Assembly, 1st Regular Session
Last Updated November 17, 2009 at 9:25 am