bill seeks to curb vehicle appraisals | Consumer

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Taxes are front and center as Americans try to meet the April 18 deadline of this year to file their returns with the IRS.

Once the deadline has passed, taxpayers will not be able to rest for long. Another tax threatens to take a larger share in the second half of the year as supply shortages drive up the cost of used vehicles.

Because county appraisers are required to use the National Automobile Dealers Association’s Official Used Car Guide to set appraisals, and because used vehicle prices are up 41% for the year, car and truck owners could be reeling from the stickers when personal property bills arrive later. in 2022. A vehicle should lose value as soon as it leaves the lot, but this is not what is happening.

“Conventional wisdom says that real estate appreciates and personal assets depreciate,” said State Rep. Brad Hudson, a Republican from southwestern Missouri. “We have an unusual market. This has led to the point where the latest edition of the NADA guide shows that the value of used vehicles is increasing.

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

“I guarantee you that when the tax bills come out in November, they will look into this,” said Hudson, a former county assessor. “We try to solve a problem before it happens.”

Hudson has filed legislation that aims to give appraisers the ability to use a range of prices from the last three years of NADA guides to set vehicle appraisals. Because a property tax bill is based on the assessment, this could make a difference. Legislative research gave the 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 to 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, motor homes 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 reviewers a bit of flexibility.”

Wilson sees the bill as a necessary short-term measure because of the unusual auto 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, used cars should start to depreciate again like 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 magnitude of the supply problem.

He said new-vehicle inventories are expected to start rising in the fall, although used-car prices won’t be hit for six months.

“It’s a perfect storm of trouble,” he said. “I don’t know if we’ll ever see something like that again.”

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