The Missouri Senate gave early approval this week to a personal property tax cut that appears to counter the recent surge in used-car valuations.
The bill has seen multiple forms in past years and in this year’s session. The debate on the floor made it clear that the current bill could see revisions and compromises until a final passage.
Currently, personal property is taxed at 33.3% of its value. Under legislation sponsored by Senator Bill Eigel, R-Weldon Spring, personal property would initially be taxed at 31% of its value.
The bill also establishes a 10-year depreciation scale for personal property. The scale depreciates the value of the property every year up to 10 years after production. After that point, the owner would be exempt from personal property taxes on the property.
Proponents of the change pointed out that some car owners have seen their tax bill rise in recent years despite owning the same car because used-car values have risen during the COVID-19 pandemic.
Senator Denny Hoskins, R-Warrensburg, added farm equipment to the 10-year depreciation scale via amendment. Farm equipment is already taxed at a much lower rate but doesn’t have a 10-year depreciation scale.
Much of the discussion around the bill revolved around how personal property tax cuts will impact local counties and municipalities.
Senator Mike Cierpiot, head of R-Lee, criticized the legislation during the debate. He tabled his own residential property tax bill, but expressed concern about the impact of the personal property tax cut as currently written.
“If we kill counties, we don’t get a second bite of the apple,” Cierpiot said.
The most outspoken opposition to the bill came from Senator Doug Beck D-Affton. Beck offered more amendments to make sure counties didn’t lose funding. He focused on how local police and fire departments could lose funds.
Eigel countered by pointing out that many counties’ revenues have never been higher, also saying that funding for services won’t be significantly affected by these cuts.
Beck’s amendments would have made the state fund the gap that municipalities would have lost through the cut. They were rejected by a roll call vote.
Sen. Barbara Washington, D-Kansas City; Sen. Steven Roberts, D-St. Louis; and Sen. Angela Mosley, D-Florissant, has offered amendments to exempt their districts from the tax cut. They cited their already underfunded school systems as reasons for the exemption.
Washington has said that personal property taxes are critical to keeping the school systems in his district at least at the status quo. All three exemption amendments proposed by the senators were rejected.
Missouri News Network work is written by students and editors of the Missouri School of Journalism for publication in member newspapers of the Missouri Press Association.