The Missouri House has approved a bill requiring car dealerships to collect sales tax when a vehicle has been purchased, eliminating the need for temporary tags. 

HB 415, sponsored by state Rep. Michael O’Donnell, R-Oakville, moves on to the Senate.

Under the bill, all motor vehicle dealers licensed under section 301.650 would be required to collect and remit sales tax on vehicles sold on their lot, making temporary tags obsolete. 

Dealers in Illinois are certified to handle state transactions such as registration, tax collection and license plate sales. Missouri dealerships may follow the same procedure if the bill is approved by the Senate and signed by the governor.

Gov. Mike Parson signed a bill in 2021 that would end the need for temporary tags, but O’Donnell’s bill formalizes the process by which dealerships can collect taxes on-site, eradicating the need for temp tags. 

Currently in Missouri, once a vehicle is purchased, residents receive temp tags and must report to the Department of Revenue office within 30 days to pay sales tax and purchase license plates. 

Under the bill, buyers would have to pay a lump sum before taking their vehicle off the lot. Residents have been known to continue to drive with expired temp tags because they claim to be unable to afford to pay the sales tax all at once. HB 415 would allow sales tax to be rolled into the buyers’ monthly payments. 

If approved, the Department of Revenue would set the actual rules and regulations governing execution of the bill. 

The bill is similar to HB 1733, introduced by O’Donnell in 2022, and HB 667, introduced by Rep. Donna Baringer, D-St. Louis, in 2021. 

If approved, O’Donnell’s bill would take effect Aug. 28.