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Erika McGuire
COLUMBIA, Mo. (KMIZ)
A new Missouri law will require drivers to pay the motor vehicle sales tax directly at the car dealership when purchasing a vehicle in a bid to reduce the number of expired temporary tags on the road.
It will require drivers to pay their motor vehicle sales tax directly at the dealership at the time of purchase, ensuring vehicles are properly registered and tracked from the start. The law is set to take effect Aug. 28, but the change to paying vehicle sales tax up front will only be implemented once the Department of Revenue’s new system is fully operational and viable, likely sometime late 2026.
Until then, the current process remains in place.
The Missouri state sales tax rate on vehicles is 4.225%. Owners also pay local sales tax. The problem of drivers not paying their vehicle sales tax within the 30-day window after purchase has persisted for years, frequently resulting in delays and uncollected fees.
Missouri Department of Revenue Director Trish Vincent said the department is working on a system to put in car dealerships around the state that will allow customers to pay their sales tax at the time of purchase, streamlining the process and reducing the need for temporary tags.
“When you go in and purchase a car, you will have to pay the sales tax when you go in with a dealer and make the deal, even a used car,” Vincent said.
With the new system, you’ll be immediately tied to your permanent license plate number at purchase, making it easier for the Department of Revenue to track.
“It will look like a temp tag, but it will have your license configuration on it, and then we will mail you your metal plate, so temp tags will be a thing of the past in a couple years. And we’re working on that system right now,” Vincent said.
Vincent said the new law will close the loophole of drivers avoiding paying their sales tax, which pays for improvements to Missouri roads. Some of the money also goes to county governments. She said the Department of Revenue processes over 1 million vehicle titles a year, and when drivers avoid registering their vehicles, it adds up fast.
“You average that out, and the average tax is $1,200. That’s $1.2 billion or over that a year we’re taking in for highway, and if you’re not paying that, you’re taking away from highways,” Vincent said.
The DOR reported more than 113,000 delinquent fee accounts related to temporary permits sold between January 1, 2021, and July 23, 2024, with a combined estimated due amount approaching $145 million.
Last year alone, the Department of Revenue says it collected over $635 million in motor vehicle sales tax, and loses between $20 million-$30 million a year due to unpaid sales taxes. Vincent said the pandemic contributed to more drivers falling behind on paying their vehicle sales tax and the economy.
“I think in unpaid, we are at $28 million or so unpaid. Now, cars cost a lot more than they used to, and of course, there is tax on that amount that you pay. That’s a higher cost. I think economic times are hard,” Vincent said.
The dealership perspective
Longtime car salesman Eric Cronacher said he has noticed leasing vehicles has become more common, partly because sales tax is not included in vehicle leases. But, once the law takes effect, it could change a buyer’s budget.
“The banks turn around and turn somebody down because they don’t have enough room in their budget for their sales tax that could impact some sales,” Cronacher said.
While the law will bring new requirements for buyers, Cronacher believes the changes will ultimately benefit consumers.
“It will be a relief more than anything, I believe,” he said. “Anything to make it easier for the consumer makes it a little easier to buy cars, in my opinion.”
To figure out the sales tax on your vehicle, you can use the sales tax calculator available on the Department of Revenue website.
Some drivers say paying the tax up front could be a financial hurdle, while others think it’ll simplify the process.
Missouri resident Denise Schinabery said she understands both sides of the issue.
“It is frustrating when you see it, and it’s like two or three years old and nothing is being done,” Schinabery said. “But I also have to think I don’t know the whole story.”
Resident Jennifer Buck said she also feels the same way.
“I feel like there are people that never ever get them, and that’s frustrating, and I don’t know what the solution is, and I feel like these are people that are living paycheck to paycheck. I feel like it’s a sticky situation.”
Enforcement
The Missouri State Highway Patrol says it issued 15,000 citations in 2024 for expired temporary tags and expired license plates.
Drivers are expected to pay their sales tax within 30 days of buying their vehicle to obtain their license plates. If they don’t and get pulled over, Sgt. Kyle Green with MSHP Troop F says a driver faces a fine of $50.50 plus county court costs.
If a driver fails to title their vehicle within 30 days, there is a title penalty of $25 on the 31st day after purchase. The penalty increases another $25 for every 30 days you are late, with a maximum penalty of $200.
If a tag is more than 60 days expired, the fine could jump to $250.
Some drivers tend to drive around with expired tags for months or even years, but Green said that doesn’t mean they aren’t being stopped and cited by law enforcement. He said enforcement isn’t weak; it’s just misunderstood by the public.
“We can issue a citation every time we stop them. Let’s say a vehicle expired six months ago and they have been stopped three or four times and maybe received three or four citations. Nothing forces that person to go get that vehicle registered,” Green said. “They will pay the fine and move on, but to the general public, it looks like they are still driving around and nothing has been done, and when in fact that truly isn’t the case.”
Green said that while drivers can be issued multiple citations for expired tags, the costs can quickly add up, and repeatedly ticketing someone doesn’t always solve the problem.
“We don’t want to keep stacking tickets on somebody because ultimately it doesn’t force them to go get their vehicle registered. It might put them further behind financially,” Green said.
“To stake one ticket on top of another in a very short time frame would kinda defeat the purpose of them going to get their vehicle registered, especially if money is an issue.”
He said drivers with vehicles of all price ranges skip out on paying the sales tax, and for some, it is cheaper to keep paying the fines.
“Ten tickets for and pay it, and while that may be a lot of money, it may still not be nearly as much money as they will owe in sales tax,” Green said. “Trying to get people to go in there, it doesn’t force them to do that, and for many of them, they would rather take the chance and drive around with an expired temp tag and run the risk of getting a ticket rather than getting the sales tax part taken care of.”
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