JEFFERSON CITY, Mo. — Missouri residents could receive a tax break of roughly $138 million under legislation passed by the House of Representatives on Thursday in an effort to offset the recent increase in local tax collections caused by higher vehicle values.
The legislation changing the way Missouri property income taxes are calculated comes as lawmakers in numerous states this year consider ways to reduce property taxes on homes, real estate and other real estate.
The value of homes has risen faster than normal in recent years. Vehicle values typically decline as cars and trucks age, but used vehicle values also rose during the coronavirus pandemic due to supply shortages. That resulted in higher tax bills for many people in states that allow property taxes on vehicles.
Republican state Rep. Mike McGirl said his Missouri legislation, now heading to the Senate, would return to taxpayers about a quarter of the “windfall” local governments received from the increase in car values. Legislative analysts said that could reach about $138 million by 2026.
The bill “will ultimately mean less tax revenue for our schools (and) for public safety,” Democratic Rep. said. Peter Merideth, who opposed the measure.
The Tax Foundation, a nonprofit organization that researches taxes, has said property taxes will likely be the biggest tax issue in many state legislatures this year.
Several states have already implemented property tax cuts. West Virginia last year approved a credit for the personal property taxes residents pay annually on vehicles, at an estimated cost to the state of $157 million.
Colorado lawmakers, meeting during a special session in November, approved legislation that increases the homestead deduction for property taxes and lowers the property tax rate. In Texas, voters in November approved a plan to cut property taxes by $18 billion.