Missouri House Bill HB1818

Missouri 2022 Regular Session

• Introduced: 1/5/22
• Refer: 5/13/22

Caption

Modifies the time period during which the amount for a traded-in motor vehicle may be credited to the purchase price of another motor vehicle for sales tax calculations

Impact

If enacted, HB1818 will repeal the existing section 144.025 of the Revised Statutes of Missouri and replace it with a new provision that specifically addresses how sales taxes are calculated for trade-ins. The bill stipulates that if a purchaser trades in a vehicle and applies the trade-in value against the purchase price of a new vehicle, they will only owe sales taxes on the remaining balance. This change is particularly aimed at making it financially advantageous for consumers who choose to trade in their old vehicles and buy new ones.

Summary

House Bill 1818 seeks to modify the current sales tax regulations concerning trade-in purchases of motor vehicles, boats, and trailers in Missouri. The bill proposes a new framework under which sales tax will be assessed only on the portion of the sale price that exceeds the value of the trade-in or any applicable rebate. This aims to provide clarity and adjust the tax burden more favorably for purchasers engaging in trade-ins, particularly with motor vehicles and associated equipment.

Contention

One notable aspect of the bill is that it includes provisions specifically benefiting individuals aged 65 and older, allowing them to receive the trade-in allowance and applicable rebates if they purchase another vehicle within defined timeframes surrounding the trade-in. This provision may spur discussions regarding its fairness and potential discrimination based on age, as well as how it aligns with broader tax equity principles. Stakeholders may express concerns about how these changes affect public revenue and the operational implications for automotive dealers in the state.