Fewer paper tags on Missouri roads? This new law aims to do that
A new Missouri law could mean drivers will see fewer temporary tags on their roads. But it will take more than a year.
Senate Bill 28 takes effect Aug. 28 to let the state plan and implement a new system for car owners to pay vehicle sales tax.
Currently, Missouri drivers get a temporary paper tag at the dealership and get their permanent license plate when they pay the vehicle sales tax at the DMV.
While the temporary tags are only valid for three months or less, many Missourians let them expire instead of paying sales taxes. This means years-expired paper tags are a common sight on Missouri roads.
The Star contacted the Missouri Automobile Dealers Association and more than five Kansas City area dealerships, and they did not respond to requests for comment.
What does the new vehicle registration law mean for Missouri drivers?
Senate Bill 28 changes the requirements for getting temporary license plates on cars and trucks. Under the new process, drivers will have to pay the sales tax for their vehicle at the dealership, making it easier to go from a paper temporary tag to a permanent license plate.
When the new system is implemented in late 2026 or early 2027, Missouri’s vehicle sales tax will be handled like it is in Kansas.
JoDonn Cheney, spokesperson for the Missouri Department of Revenue, explained these changes.
“The amount of money that you spend isn’t going to change. It’s just going to be when you have to have it available to go get your new car.”
This means car-buyers will not necessarily need to have cash ready within 30 or 90 days to pay their sales tax when go to the DMV to register their car.
Under the new system, Missourians will be able to negotiate to include the cost of the vehicle’s sales tax in the financing of their car.
What goes into making these changes?
Cheney said that these changes will be a big undertaking in a state with 4.4 million licensed drivers and 13.4 million active titles.
The new system will be known by the acronym FUSION, which stands for “fifty unique systems in one nucleus.”
Cheney described parts of the state’s current vehicle registration system as “dinosaurs,” decades old and out of date.
The Department of Revenue is working with Missouri’s hundreds of dealerships to make sure they can send the sales tax to the state.
This is why Cheney said it will take until the first months of 2027 at the latest to implement the streamlined new system.
How much does vehicle sales tax cost in Missouri?
The total for sales tax depends on how much the car costs and where it was purchased, like sales tax for groceries or electronics. You can estimate the amount of sales tax you have to pay for a vehicle on the state’s website.
Missouri collects a 4.225% state tax, and municipal governments set their own sales tax rates. They are typically higher in urban areas and range from 1% in Bates County to 5.763% in St. Louis County, according to Cheney.
This summer, Kelley Blue Book stated the average price of a new car was $48,749 and the average price of used car was $25,512.
This means Missouri drivers would have to pay $2,500-$4,800 in sales tax for an average new car, and $1,300-$2,500 for an average used car.
Cheney said that Missouri loses $20-$30 million in state sales tax revenue from people not registering their cars, in addition to lost local and county sales tax and annual property tax dollars.
What’s the penalty for having expired tags?
When a Missouri driver registers their car more than 30 days after they bought it, they have to pay an additional fee. The Department of Revenue’s late registration penalty is $25 for every 30 days late, up to $200.
Getting caught with expired plates could get you pulled over and ticket. Failing to register a motor vehicle comes with a $50.50 fine, according to the Missouri court fine schedule.
