COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.:1159H.01I Bill No.:HB 590 Subject:Taxation and Revenue - General; Taxation and Revenue - Sales and Use; Motor
Vehicles; Department of Revenue
Type:Original Date:March 16, 2023Bill Summary:This proposal exempts certain motor vehicles from sales tax.
FISCAL SUMMARY
ESTIMATED NET EFFECT ON GENERAL REVENUE FUNDFUND AFFECTEDFY 2024FY 2025FY 2026General Revenue($2,885,214)($3,363,023)($3,363,023)Total Estimated Net
Effect on General
Revenue($2,885,214)($3,363,023)($3,363,023)
ESTIMATED NET EFFECT ON OTHER STATE FUNDSFUND AFFECTEDFY 2024FY 2025FY 2026Conservation
Commission Fund($1,875,689)($2,250,827)($2,250,827)
Parks, Soils and
Water Fund($1,500,552)($1,800,662)($1,800,662)
School District Trust
Fund($7,502,758)($9,003,309)($9,003,309)
State Road Bond Fund
($22,508,273)($27,009,928)($27,009,928)
State Road Fund($22,508,273)($27,009,928)($27,009,928)Total Estimated Net
Effect on Other State
Funds($55,895,545)($67,074,654)($67,074,654)
Numbers within parentheses: () indicate costs or losses. L.R. No. 1159H.01I
Bill No. HB 590
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ESTIMATED NET EFFECT ON FEDERAL FUNDSFUND AFFECTEDFY 2024FY 2025FY 2026Total Estimated Net
Effect on All Federal
Funds $0$0$0
ESTIMATED NET EFFECT ON FULL TIME EQUIVALENT (FTE)FUND AFFECTEDFY 2024FY 2025FY 2026Total Estimated Net
Effect on FTE 000
☒ Estimated Net Effect (expenditures or reduced revenues) expected to exceed $250,000 in any
of the three fiscal years after implementation of the act or at full implementation of the act.
☐ Estimated Net Effect (savings or increased revenues) expected to exceed $250,000 in any of
the three fiscal years after implementation of the act or at full implementation of the act.
ESTIMATED NET EFFECT ON LOCAL FUNDSFUND AFFECTEDFY 2024FY 2025FY 2026Local Government($56,205,223)($67,446,268)($67,446,268) L.R. No. 1159H.01I
Bill No. HB 590
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FISCAL ANALYSIS
ASSUMPTION
Officials from the Department of Revenue (DOR) assume the following regarding this
proposal:
Administrative Impact
In order to implement the proposed legislation, the Department will be required to:
• Update procedures, forms, and the Department website;
• Update the Missouri Titling Manual;
• Update the Dealer and Business Operating Manual;
• Implement identified system changes and conduct UAT testing; and
• Train Staff.
FY 2024 – Motor Vehicle Bureau
Associate Research/Data Analyst 327 hrs. @ $19.90 per hr. = $ 6,507
Research/Data Analyst 82 hrs. @ $24.84 per hr. = $ 2,037
Administrative Manager 41 hrs. @ $26.96 per hr. = $ 1,105
FY 2024 – Strategy and Communications Office
Research /Data Assistant 80 hrs. @ $24.84 per hr. = $ 1,987
Administrative Manager 20 hrs. @ $26.96 per hr. = $ 539
Total Costs = $12,175
The Department anticipates being able to absorb these administrative costs. If multiple bills are
passed that require Department resources, funding may be requested through the appropriations
process.
Oversight assumes DOR will use existing staff and will not hire additional FTE to conduct these
activities; therefore, Oversight will not reflect the administrative costs DOR has indicated on the
fiscal note.
DOR notes OA-ITSD services will be required at a cost of $82,695 in FY 2024 (870.48 hours x
$95 per hour).
Oversight does not have any information to the contrary in regards to DOR’s assumptions;
therefore, Oversight will reflect DOR’s OA-ITSD costs on the fiscal note. L.R. No. 1159H.01I
Bill No. HB 590
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Revenue Impact
Loss of State Tax
DOR notes, from FY 2020 to 2022, the average motor vehicles titled where the model year was
more than 10 years old at the time of purchase with a purchase price of $25,000 or less is
547,792 and the average state tax collected was $65,369,556.
Fiscal YearMotor Vehicles Over 10
Years Old Titled
State Tax Collected2020497,798$52,681,0812021567,219$67,349,6262022578,360$76,077,963
Average total loss of state taxes collected annually $65,369,556
DOR 3% collection fee loss $1,961,086
Loss of Local Tax
In FY 2020 to 2022, the average motor vehicles titled where the model year is more than 10
years old at the time of purchase with a purchase price of $25,000 or less is 547,792 and the
average local tax collected was $49,736,008.
Fiscal YearMotor Vehicles Over 10
Years Old Titled
Local Tax Collected2020497,798$39,216,6662021567,219$51,548,4012022578,360$58,442,959
Average total loss of local taxes collected annually $49,736,008
DOR 3% collection fee loss $1,432,080
Officials from the Office of Administration - Budget and Planning (B&P) assume the
following regarding this proposal:
This proposal would exclude the sale of motor vehicles over 10 years old and with a purchase
price less than $25,000 from state and local sales tax beginning August 28, 2023.
Based on information provided by DOR, sales tax collections for qualifying motor vehicles were
$134,520,922 ($76,077,963 state + $58,442,959 local) in FY 2022.
B&P notes that the state sales tax rate is 4.225%, which is distributed between the State Road
Bond Fund, State Road Fund, State Transportation Fund, Fuel Local Deposit (FLOYD), School
District Trust Fund, Conservation, and Parks, Soil and Water funds (DNR). L.R. No. 1159H.01I
Bill No. HB 590
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B&P further notes that monies deposited into FLOYD are distributed to locals.
State FundsFY 2024FY 2025+State Road Bond Fund($22,508,273)($27,009,928)State Road Fund($21,908,052)($26,289,663)State Transportation Fund($600,221)($720,265)Education (SDTF) ($7,502,758)($9,003,309)Conservation($1,875,689)($2,250,827)DNR($1,500,552)($1,800,662)Total Estimated Loss($55,895,545)($67,074,654) Local Funds Sales Tax($48,702,466)($58,442,959)Fuel Local Deposit (FLOYD)($7,502,757)($9,003,309)Total Estimated Loss($56,205,223)($67,446,268)
Oversight does not have information to the contrary and therefore, Oversight will reflect the
estimates as provided by B&P and DOR based on sales from FY 2022.
Officials from the Missouri Department of Transportation and Missouri Highway Patrol
defer to DOR for the potential fiscal impact of this proposal. L.R. No. 1159H.01I
Bill No. HB 590
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FISCAL IMPACT – State GovernmentFY 2024
(10 Mo.)
FY 2025FY 2026GENERAL REVENUECost – DOR – OA-ITSD services($82,695)$0$0Loss – DOR – no longer receiving the
3% collection fee for vehicles over 10
years old with a purchase price less
than $25,000($2,802,519)($3,363,023)($3,363,023)
ESTIMATED NET EFFECT ON
THE GENERAL REVENUE FUND
($2,885,214)($3,363,023)($3,363,023)CONSERVATION COMMISSION
FUND (0609)
Loss – sales tax for vehicles over 10
years old with a purchase price less
than $25,000($1,875,689)($2,250,827)($2,250,827)
ESTIMATED NET EFFECT ON
THE CONSERVATION
COMMISSION FUND($1,875,689)($2,250,827)($2,250,827)
PARKS, SOIL AND WATER FUND
(0613 & 0614)
Loss – sales tax for vehicles over 10
years old with a purchase price less
than $25,000($1,500,552)($1,800,662)($1,800,662)
ESTIMATED NET EFFECT ON
THE PARKS, SOIL AND WATER
FUND($1,500,552)($1,800,662)($1,800,662) L.R. No. 1159H.01I
Bill No. HB 590
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FISCAL IMPACT – State Government
( continued)
FY 2024
(10 Mo.)
FY 2025FY 2026SCHOOL DISTRICT TRUST FUND
(0688)
Loss – sales tax for vehicles over 10
years old with a purchase price less
than $25,000($7,502,758)($9,003,309)($9,003,309)
ESTIMATED NET EFFECT ON
THE SCHOOL DISTRICT TRUST
FUND($7,502,758)($9,003,309)($9,003,309)
STATE ROAD BOND FUND (0319)Loss – sales tax for vehicles over 10
years old with a purchase price less
than $25,000($22,508,273)($27,009,928)($27,009,928)
ESTIMATED NET EFFECT ON
THE STATE ROAD BOND FUND($22,508,273)($27,009,928)($27,009,928)
STATE ROAD FUND (0320)Loss – sales tax for vehicles over 10
years old with a purchase price less
than $25,000($22,508,273)($27,009,928)($27,009,928)
ESTIMATED NET EFFECT ON
THE STATE ROAD FUND($22,508,273)($27,009,928)($27,009,928) L.R. No. 1159H.01I
Bill No. HB 590
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FISCAL IMPACT – Local GovernmentFY 2024
(10 Mo.)
FY 2025FY 2026LOCAL POLITICAL
SUBDIVISIONS
Loss – sales tax for vehicles over 10
years old with a purchase price less
than $25,000($56,205,223)($67,446,268)($67,446,268)
ESTIMATED NET EFFECT ON
LOCAL POLITICAL
SUBDIVISIONS($56,205,223)($67,446,268)($67,446,268)
FISCAL IMPACT – Small Business
No direct fiscal impact to small businesses would be expected as a result of this proposal.
FISCAL DESCRIPTION
This bill exempts the sale of a motor vehicle that is more than 10 years old, and sold for the
purchase price of less than $25,000, from sales tax.
This legislation is not federally mandated, would not duplicate any other program and would not
require additional capital improvements or rental space.
SOURCES OF INFORMATION
Department of Revenue
Office of Administration - Budget and Planning
Missouri Highway Patrol
Missouri Department of Transportation
Julie MorffRoss StropeDirectorAssistant DirectorMarch 16, 2023March 16, 2023