What you need to know about the Grain Valley motor vehicle sales tax vote

Marc Lavoie City News

Grain Valley City Hall

GRAIN VALLEY RESIDENTS TO VOTE AUG. 2 ON MOTOR VEHICLE SALES TAX

Grain Valley, Mo. – Tuesday, August 2, voters in Grain Valley will be asked whether or not to discontinue the collection of the city’s sales tax on motor vehicles, trailers, boats and outboard motors purchased from out-of-state dealers.

FREQUENTLY ASKED QUESTIONS:

Why is this issue on the ballot?

In 2012 the Missouri Supreme Court ruled that cities without a use tax (a tax similar to a sales tax that is imposed on out-of-state purchases) would be required to discontinue collecting local sales tax on out of state purchases of motor vehicles, trailers, boats and outboard motors unless an election is held allowing voters to vote against discontinuation of the tax.

If the question is not placed on the ballot, or if the tax is discontinued by voters, the tax would cease to be collected beginning November 2018.

Is this a new tax?

No. The city has collected this tax for many years. The question is on the ballot only as a result of the Missouri Supreme Court decision and the state legislation that followed. If the question is not placed on the ballot, or if the tax is discontinued by voters, the tax would cease to be collected beginning November 2018.

How much tax revenue is in question?

The estimated annual revenue collected from out-of-state vehicle taxes for the City of Grain Valley is $146,000 in 2018. Should voters decide to discontinue the tax, services would have to be cut to account for this loss of funding.

How would services be cut if the tax is discontinued?

The General Fund provides for a number of basic city services such as police, parks, code enforcement and inspections. The General Fund would be cut by $59,000 annually.

The Transportation Fund provides services such as street and sidewalk improvements/repairs, street lighting, snow removal, street signs, street sweeping, and tree maintenance. The Transportation Fund would be cut by $29,000 annually.

The Parks Fund provides operation, maintenance and development of City parks and trails. The Park Fund would be cut by $29,000 annually.

The Capital Improvement Fund provides vital resources to maintain and grow the City’s aging infrastructure. The Capital Improvement Fund would be cut by $29,000 annually.

How Does the Tax Affect Me?

The tax only applies to you if you purchase a motor vehicle, trailer, boat or outboard motor from out of state. Similar purchases made in-state will be subject to the local sales tax regardless of the vote on this ballot question.

In Missouri, state and local sales tax on motor vehicles, trailers, boats and outboard motors is collected by the Missouri Department of Revenue, when the purchaser applies for a new title for the vehicle (a requirement for vehicle licensing).

Is There an Impact on Local Dealerships?

Yes. The existence of the tax creates a level playing field for Missouri dealerships. If the existing tax were to end, Missouri dealerships would be at a competitive disadvantage with out-of-state dealerships.

What is the sales taxes rate that I currently pay on a vehicle purchased as a Grain Valley resident?

Currently, any vehicle purchased by a Grain Valley resident is subject to a 8.475% sales tax (4.225% state tax, 2.5% city sales taxes, 1.125% Jackson County, .5% Fire Protection District and .125% Friends of the Zoo).

What is the Ballot Language?

“Shall the City of Grain Valley, Missouri discontinue applying and collecting the local sales tax on the titling of motor vehicles, trailers, boats and outboard motors that were purchased from a source other than a licensed Missouri dealer?”

Approval of this measure will result in a reduction of local revenue to provide for vital services for the City of Grain Valley and it will place Missouri dealers of motor vehicles, trailers, boats and outboard motors at a competitive disadvantage to non-Missouri dealers of motor vehicles, trailers, boats and outboard motors.

What if I Vote No?

A no vote:
• Allows continued collection of existing sales taxes.
• Keeps licensed Grain Valley dealers competitive with dealers located out of state.
• Does not authorize new sales taxes.

What if I Vote Yes?

A yes vote:
• Eliminates collection of city sales taxes on motor vehicles, trailers, boats and outboard motors purchased from out-of-state dealers.
• Reduces local revenue that pays for vital city services.