Vote YES to STOP Double Taxation
Frequently Asked Media Questions June 2010
What would your proposal do?
It would amend the Missouri Constitution to prevent Double Taxation on homes and other properties.
What is the specific language of your proposal?
"Shall the Missouri Constitution be amended to prevent the state, counties, and other political subdivisions from imposing any new tax, including a sales tax, on the sale or transfer of homes or any other real estate?"
What is a real estate transfer tax?
It's a tax imposed by state or local governments, or both, that is collected when you transfer ownership of your home, land or other real estate. Typically, once the tax is on the books, the rate can be increased by the state, city or county without a vote of the people.
Do Missouri or its local governments now impose real estate transfer taxes?
These unfair taxes are currently allowed under the Missouri Constitution. Even though these unfair taxes are not now being collected in Missouri, 37 states and the District of Columbia are imposing some variation of a real estate transfer tax. Missouri needs to head off this temptation to politicians that amounts to unfair double taxation.
How many states impose real estate transfer taxes or their equivalents?
Currently, 37 states and the District of Columbia impose transfer taxes or their equivalents, while Missouri is among 13 states that do not impose such taxes. All of Missouri's neighboring states impose some variation of a tax on real estate transactions.
If Missouri and its local governments don't now impose real estate transfer taxes, why should we change our Constitution to bar these taxes?
As state, county and city revenues decline, politicians are tempted to raise taxes, just as Missouri citizens are struggling to make it. All of Missouri's neighboring states have imposed some sort of real estate transfer tax. Politicians frequently borrow bad ideas. Once these double taxes are on the books, politicians can increase the tax rates. Nationally, states have raised the tax rate 80 percent on average each time they have imposed transfer taxes. It can happen in Missouri under current law. Missourians should keep politicians from miring us in the bad public policy quicksand of unfair double taxation.
What is your objection to a real estate transfer tax?
Missouri homeowners already pay property tax. A real estate transfer tax is nothing more than double taxation. Many sellers have owned their homes for decades, and they have already paid thousands of dollars in property taxes and other fees. Adding double taxation through a real estate transfer tax is simply bad public policy. It denies fairness, and it defies Missouri common sense.
How would a real estate transfer tax affect families that own property?
Real estate transfer taxes are family-unfriendly. Small farms and family homes that have been passed down for generations would be subject to the new and unfair burden of double taxation, if transfer taxes are imposed on land for which property taxes have already been paid for decades. And such a transfer tax would be imposed before the federal government takes its 50 percent "death tax" bite on family properties. Missouri common sense tells us we should rule out such family unfriendly taxation that destroys dreams.
What would be the economic impact of imposing real estate transfer taxes at the state or local level in Missouri?
In this tough economy, many Missourians have lost jobs or had pay cuts. Some have been forced to sell their homes, many at a loss because of drops in property values. This is particularly true for lower-income Missourians, who typically spend a larger percentage of their income on their home. Our Missouri neighbors experiencing this severe financial strain shouldn't be subjected to more taxes, especially the double taxation of a real estate transfer tax.
What would be the proposal's fiscal impact on government?
Since these unfair taxes are not now being collected in Missouri, and the proposal would keep it that way, there would not be a new fiscal impact.
How would your proposal interact with proposals for a "Fair Tax?"
The Fair Tax would be intended to replace the state income tax with a sales tax on certain items. This year, Missouri lawmakers debated but took no final action on Fair Tax legislation. It's up to the drafters of any proposed Fair Tax to decide which items would be subject to the new sales tax. But a priority in that consideration is assuring that adequate revenue is generated to replace the income tax, while achieving key goals of creating jobs and drawing companies and workers to Missouri. Those companies and their workers will want to buy business properties and homes. So to grow the economy, we must make certain there is not additional taxation on real estate for businesses and individuals we want to attract to Missouri. The Fair Tax and prohibiting transfer taxes on real estate are absolutely in sync, when it comes to having the greatest potential positive impact on job creation. Our campaign is not advocating or opposing the Fair Tax. But regardless of where you stand on the Fair Tax, we can all agree that the same piece of property should not be taxed twice.
How does the proposed amendment interact with the Missouri Constitution's existing Hancock Amendment, and does Hancock already provide adequate legal protection against a transfer tax?
The state legislature can comply with the Hancock Amendment and still raise taxes on its own - without a vote of the people - up to about $90 million a year. And such a tax increase could be imposed by the legislature through a real estate transfer tax. So the Hancock Amendment doesn't offer protection against a transfer tax. And, there is no settled case law on the question of whether the Hancock Amendment would limit the ability of local governments to boost a transfer tax rate without seeking a vote of the people. That's because there is debate, even among legal experts, about how the Hancock Amendment applies to municipalities. And that's another reason we cannot depend on the Hancock Amendment to protect us from a transfer tax. Finally, the proposed amendment to bar a transfer tax doesn't clash with the Hancock Amendment's tax limitation provisions. It actually compliments Hancock, because the transfer tax proposal is revenue neutral since the transfer tax isn't currently being collected and the tax would be barred under the proposed amendment.
Why make this effort in Missouri?
Where better than the heart of our country to make a stand to defend the heart of the American dream of home ownership? We are making this stand because Missouri is a national bellwether, and our people are known for their common sense.
Who is backing this proposed state constitutional amendment?
The proposal's primary supporters are the 22,000 members of the Missouri Association of REALTORS ®, which is our state's largest trade association, comprised of hometown neighbors from every Missouri community. Together, the Missouri Association of REALTORS ® members have established a state campaign committee in support of the amendment: The Vote YES to STOP Double Taxation Committee.
What is the Missouri Association of REALTORS ®?
The Missouri Association of REALTORS ® is a professional association that is 22,000 members strong. We are the largest trade association in Missouri. Our members are personally invested in our communities in countless ways - raising families, leading in volunteerism, serving on local boards, sharing church pews, school meetings and our joys and tragedies. This spirit of community involvement reaches out nationally; for example, in the aftermath of both 9/11 and Hurricane Katrina, REALTORS ® came together immediately to volunteer in relief and shelter projects. We care about our neighbors and work to help them achieve the American dream of home ownership.
Who is opposing this proposal?
We are unaware of any organized opposition to this good-government proposal.
Have you done any polling?
Yes. Our polling found more than seven-in-ten Missouri registered voters support this proposal to STOP double taxation, reflecting Missouri common sense about bad public policy. Missourians by similar strong majorities said they would have serious doubts about their elected officials who didn't share their support of this amendment.
What is the process for getting the proposal onto the ballot?
As with all citizen ballot initiatives in Missouri, sponsors are required by law to obtain a certain number of signatures of registered voters on petitions to place the measure on the ballot for a statewide vote. We have gathered tens of thousands of signatures of registered Missouri voters, including a comfortable cushion of additional signatures, to place this amendment before our neighbors this November. Those petitions are now awaiting certification from the Missouri Secretary of State, which is expected later this summer. At that point, our proposal would be assigned an amendment number for the statewide ballot. Once that happens, we will have an extensive educational campaign to encourage Missourians to vote YES to Stop Double Taxation.
