Missouri personal property tax bills on the way, likely higher than previous years

ST. LOUIS – It’s that time of year again when property tax bills may soon start showing up in your mailboxes. A friendly warning to Missouri car owners, your bill could be more expensive than in years past.

Missouri residents are required to pay personal property taxes to their local county assessor’s office each year by December 1. This includes cars, boats, farm equipment and other miscellaneous assets.

According to the Missouri State Tax Commission, local assessors determine tax bills based on the estimated market value of the property. Counties may differ in assessment rates and tax rates, but the market value of assessed property is constant regardless of where personal property tax is collected.

In Missouri, cars are appraised based on the trade-in value published by the National Automobile Dealers’ Association (NADA) Official Used Car Guide in an October issue of the previous year. Thus, personal property taxes collected on cars are based on the NADA value of October 2021.

According to NADA Sales Forecast 2022“Through October 2021, the average used vehicle transaction price at franchise dealerships was $25,904, up 19.1% year-over-year.”

What does it mean?

Essentially, if your municipality hasn’t taken steps to reduce assessment or tax rates, your property tax bill could go up by about 20%.

How can you notice this on an invoice? For example, let’s use Tariffs of the city of Saint-Louis to calculate a difference.

Take a car that was worth $20,000 when the taxes were collected last year. If its value remained consistent with NADA averages, it would be worth around $24,000.

The city of St. Louis has an assessment rate of approximately 33.3% and a tax rate of 8.2%. Factor those two into the car’s assessed value, a bill that would have been around $540 last year would be worth nearly $650 this tax year.

The basic algorithm for calculating these taxes in your county:

Valued NADA value * percentage value of tax rate * percentage value of tax rates.

Why are the prices increasing?

NADA suggests that over the past year, at various stages of the COVID-19 pandemic, supply chain issues may have limited new vehicle inventory or the production of parts needed for those vehicles. For this reason, consumers who typically buy new cars have started exploring the used car market.

Ultimately, this created greater demand for used vehicles in the United States, thereby driving up prices.

“This discrepancy is likely due to increased spending by high-income households, with low- and middle-income households feeling the impact of inflation more directly,” NADA said in the 2022 sales forecast.

It looks like the value of used cars could increase further as we approach next year with the NADA estimate an average year-over-year increase in value of 7.2% through September 2022.

And now?

Rising personal property tax bills could mean increased revenue across the state, though some local assessors may be wary of the possible negative effects.

In September, St. Charles County Council passed a bill to lower various rates for taxpayers. St. Charles County Executive Steve Ehlmann said it was an attempt “to deny the burden on taxpayers caused by inflation.”

“The property tax the county collects for roads and emergency communications is important in supporting county infrastructure and public safety,” Ehlmann said. “We stand ready to maintain a trajectory of support and growth for these areas that will in no way be negatively impacted by our willful effort to eliminate the revenue windfall that will result if we take no action.”

Despite the change, this does not necessarily mean a decrease or stagnation of costs. Global rates for taxpayers are also taken into account in part by local municipalities in the county, such as St. Charles City or St. Peters.

According to a Missouri State Tax Commission 2019 Report on movable property, “tax rates set by local authorities are set each year within the limits set by the constitution and statutes. They are based on the income received from the previous year, with a margin for growth based on the rate of inflation.

Whether or not all of this means changes to your bill, all Missourians are required to pay their property tax and real estate bills by December 31 or postmark a mail-in payment by this deadline.

In some places you can pay your bill online. Here are some of those links:

For more information on Missouri personal property taxes, Click here.

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