Understanding Gov. Parson's call for a special session on car trade-in tax credit

Published: Aug. 23, 2019 at 5:01 PM CDT
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Governor Mike Parson is calling lawmakers back to Jefferson City next month to look at changing the law when it comes to trading in your car.

The Missouri Department of Revenue has allowed a car buyer to trade in multiple cars, and use the trade-in value of those cars as a credit on a new purchase to lower the amount of sales tax the buyer would pay.

But, a recent State Supreme Court ruling says Missouri law only allows one vehicle to be used as a trade-in credit.

"If you had a $20,000 vehicle you were purchasing, and you had a trade in that was worth $10,000 and another trade-in that was worth $5,000, you would only get a $10,000 credit instead of a $15,000 credit," explained Doug McDaniel, Car Sales Consultant at Sakelaris Ford-Lincoln.

That's why Missouri Governor Mike Parson is calling for a special legislative session. He wants lawmakers to change the law to allow multiple vehicles to be traded in for tax credit on a new one.

"I think that it's unfair to the everyday citizen out here that we're basically collecting tax dollars and not giving it back to them," Parson said Friday.

Parson estimates this will help almost 3,000 Missourians, especially in rural areas.

The Missouri House Minority Leader, Springfield Representative Crystal Quade, released a statement immediately after Parson's call for a special session.

Quade said in part, "There are several issues that demand immediate legislative attention and would justify the cost of a special session. Creating another unnecessary tax break for a handful of people isn’t one of them.”

Quade said medicaid for children and gun laws should be addressed.

"All of those issues are things you do in general session," Parson said Friday. "Right now, we're talking about fixing something that we're breaking the law, the state itself, is."

McDaniel says changing the law to make sure Missourians can get credit for multiple vehicles traded-in could save you a lot of money.

"We want the consumer to pay the least amount possible," McDaniel said. "They already paid sales tax on that vehicle one time when they purchased it. They shouldn't have to do it twice."

Lawmakers will return to the State Captiol for the special legislative session on September 9, 2019. It will run concurrent to the annual veto session.

This is the second year Governor Parson has called for a special session. In 2018, he called lawmakers back to expand drug treatment courts and science education programs.