MO drivers see high personal property taxes due to unusual spike in vehicle values

Published: Dec. 2, 2022 at 10:25 PM CST
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ST. LOUIS (KMOV) -- Across Missouri, drivers are feeling the pain of having to pay higher personal property taxes. News 4 Investigates learned some local leaders claim there are ways to give taxpayers relief and that they’re doing it. But not everyone is taking action.

Personal property taxes usually don’t see a massive spike in one year. That’s because the tax is based on the value of a car, which usually depreciates with time. However, the COVID-19 pandemic and ensuing supply chain issues caused used car values to spike, which caused personal property taxes to increase.

“It should stay the same. I don’t see why anybody should have to pay more taxes on it,” said Bobby Ray, whose taxes didn’t go up all because of where he lived.

Ray’s personal property taxes stayed about the same as last year, but that’s only because he lives in Jefferson County. If Ray lived somewhere else like St. Louis County, the City of St. Louis, or St. Charles County, his bill would have been much more expensive.

Jefferson County Assessor Bob Boyer made the choice to use lower car values.

According to Missouri law, assessors have to use the “October issue” of the guide put out by the National Automobile Dealers’ Association (NADA) to determine a car’s “true value.” According to the law, it’s the “recommended guide.”

Boyer claims the word “recommended” gives him and other tax assessors discretion. Instead of using the most recent October issue, where car values are higher, Boyer chose to use the guide from the year before, where car values were lower.

“The law gives assessors discretion to value things what they think is fair and equitable, and that’s what I did,” Boyer said. “We think that was the fairest thing to do for everybody.”

Not everyone sees it that way. When you compare a Jefferson County bill to one from St. Louis County, the Jefferson County bill stayed the same and the St. Louis County bill increased by about $250.

St. Louis City Assessor Michael Dauphin claims his hands are tied by the law and that he has to use current car values when he sets taxes.

“We have essentially no discretion,” Dauphin said. “We’re required by law to use the most current NADA values and that’s what we’re going to do.”

It’s a similar story in St. Louis County, where Assessor Jake Zimmerman says unprecedented car values doesn’t mean he can take unprecedented steps.

“This is bonkers, cars aren’t supposed to go up in value,” Zimmerman said. “Nobody wants to get stuck with an unfair tax bill and the way to make sure that happens is for me to do my job honestly and fairly and that means following the law.”

Across the river in St. Charles County, it’s more of the same story.

“I can’t pick and choose. You have to do what’s right,” said St. Charles County Assessor Scott Shipman. “It’s easy to use a low value, nobody is going to complain. It’s not our job, our job is to be fair and equitable.”

There is a Missouri law that’s supposed to protect taxpayers from paying too much in taxes. It’s commonly referred to as the “Hancock Amendment.” In order to understand how the amendment works, you need to know where your taxes go.

When someone pays their personal property tax bill, the money is sent to tax districts. Tax districts vary based on where someone lives but include school districts, ambulance services, and fire protection districts. Each tax district has its own rate, which gets added up to make your personal property tax bill.

The Hancock Amendment says voters have to approve tax hikes, and if something is causing a tax district to get more money than what voters okayed, that tax district could have to roll back taxes.

However, the Missouri State Tax Commission sent a letter to all assessors saying that the Hancock Amendment does not apply to personal property. In other words, places like school districts that are getting a windfall of taxes this year get to keep that money and nothing requires them to roll back taxes.

Some tax districts decided to roll back taxes to help provide some relief. That was the case in St. Charles County, where the county council voted to roll back taxes on the two funds it collects from personal property taxes.

“What they did is they rolled the levy back to offset some of that gain in personal property, so taxpayers don’t feel that full brunt,” explained Scott Shipman.

That change boils down to giving back each taxpayer a couple of dollars, not much considering St. Charles County saw an overall windfall in personal property taxes of about $24 million.

St. Louis County and the City of St. Louis tell News 4 Investigates they are not looking at similar proposals.

News 4 asked some of the region’s bigger taxing districts if they’re considering rolling back taxes. Everyone that answered said they had no plans to, including St. Louis Public Schools and Rockwood Schools.

In a statement to News 4, Rockwood Schools said:

“Personal property values only represent 15% of our local tax base. Real estate property values make up 85% of our tax base. While personal property values increased significantly, overall real estate values declined due to lower property values associated with commercial real estate. In aggregate, the Rockwood School District saw a 3.1% increase in total property values.

Going forward into FY24, the district will continue to monitor updates provided by the County Assessor’s office with regard to property values and adjust the budget forecast accordingly.”

There’s another way personal property taxes could have avoided a spike. During the last legislative session, lawmakers in Jefferson City were looking at a bill to provide some relief but that work fell short.

There is currently a push to change the state tax code so that this kind of spike doesn’t happen again.

The expectation is that car values will go down next year, which would make personal property tax bills lower.