An attempt to end Missouri’s personal property tax failed to get enough votes to pass this week.
The measure, which would have saved taxpayers $1.4 billion, would bring the state in line with 29 others that do not have the tax.
Sen. Bill Eigel, R-Weldon Spring, who is sponsoring the plan, said the reduction in revenue would be softened by phasing out the tax over time. “We’re minimizing the fiscal impact in each given year,” he said.
Sen. Rick Brattin, R-Harrisonville, said the tax is hated among his constituents. “I think people will be rejoicing in what you’re trying to do,” he said. “People are going to be dancing in the streets. It’s an extremely devastating bill to get.”
Many have called the government’s taxing property a violation of the Constitutional right to own property because failure to pay the tax results in personal property being taken away.
States without personal property taxes typically use other means to generate Revenue.
A fiscal analysis of the legislation says the change could reduce local government revenue statewide by up to $1.45 billion in 2027. A compromise that emerged after talks with Senate President Dave Schatz, R-Sullivan, pegged a reduction to county-level tax collections, potentially extending the phase-out period to 10 years. The compromise failed to win enough support to advance after eight Republicans voted “no.”
“These senators will have to explain to their constituents why they abandoned the Republican principle of lower taxes to preserve a regressive, unfair tax that targets middle- and working-class homes,” Eigel said.
Currently, personal property tax is assessed at 33.3 percent of its real value. Local governments then tax that assessed value. Personal property is any property that is “tangible,” excluding real property such as land and buildings, according to the Missouri State Tax Commission definition page. Examples of personal property include vehicles, office equipment and machinery.
Eigel’s initial proposal would have reduced the assessment percentage to 25 percent in 2022, 19 percent in 2023, 13 percent in 2024, 7 percent in 2025, and one-thousandth of a percent in following years. The version that failed would have tied the reduction to local county property values, potentially taking longer to phase out.
Elimination of personal property taxes remains a popular goal for the majority of taxpayers across the country. The tax typically causes many low-income taxpayers to choose between getting tags for their vehicles or paying for insurance. They often choose tags, getting insurance only long enough to prove being insured. Stolen tags are also a serious issue in Missouri.
A Kansas City Police officer told Metro Voic that the majority of car accidents in the city involve uninsured drivers.
The cost is passed on to insured drivers through higher insurance rates.
–Alan Goforth | Metro Voice