Bill seeks to put brakes on vehicle assessments

Because county assessors are required to use the National Automobile Dealers Association’s official used car guide to set assessments, and because used vehicle prices are up 41% for the year, car and truck owners could be in for some sticker shock when personal property bills arrive later in 2022. A vehicle should lose value as soon as it’s driven off the lot, but that’s not what’s happening.

“Conventional wisdom says real estate appreciates and personal property depreciates,” said state Rep. Brad Hudson, a Republican from Southwest Missouri. “We’ve got an unusual market. It has led to the point where the latest edition of the NADA guide shows used vehicles increasing in value.”

In some cases, he said, vehicle owners could be surprised in the fall if they’re required to pay more even if they have the same old car or truck.

“I guarantee when the tax bills come out in November, they will be looking at that,” said Hudson, a former county assessor. “We’re trying to fix a problem before it occurs.”

Hudson filed legislation that seeks to give assessors an option to use a range of prices from the last three years of the NADA guides to set vehicle assessments. Because a property tax bill is based on the assessment, that could make a difference. Legislative research gave an example of a 2015 truck that was valued at $15,000 in 2020, $18,150 in 2021 and $23,595 in 2022.

Buchanan County Assessor Dean Wilson said he supports the legislation, known as House Bill 2694, and hopes it can pass with enough votes for an emergency clause, allowing the change can take place in time for tax season. HB 2694 passed the House with 116 votes, enough for an emergency clause, and now awaits action in the Senate.

Wilson’s office assessed 100,000 vehicles, campers and trailers last year. HB 2694 applies to motor vehicles, recreational vehicles and agricultural equipment.

“I think it would be big,” he said of the legislation. “I think it would give assessors a little flexibility.”

Wilson sees the bill as a short-term measure that’s necessary because of the unusual automobile market, with a shortage of computer chips reducing new car inventories to the point that used cars and trucks are in high demand.

“If you notice, most dealerships don’t have a lot of vehicles on their lots right now,” he said. “Once we get back to normal and the market corrects itself, used cars should go back to depreciating the way they have in the past.’

Doug Smith, president and CEO of the Missouri Automobile Dealers Association, said it won’t happen overnight. A Ford F-150 uses 1,200 computer chips, which illustrates the scale of the supply problem.

He said new vehicle inventories should start to increase in the fall, although used car prices won’t be impacted for another six months after that.

“It’s a perfect storm of issues,” he said. “I don’t know if we’ll see anything like this again.”