Under SB 28, signed into law by Gov. Mike Kehoe on July 2, Missouri car buyers will have to pay their sales tax at the dealership. Although the law will take effect on Aug. 28, it will not be enforced until late 2026 or early 2027, according to the Missouri Department of Revenue. 

The delay will come as the state develops its Fifty Unique Systems in one Nexus, or FUSION, software, which will allow Missouri car dealerships to assess sales tax on their purchases. 

Ricky Gastorf, of Gastorf Chevrolet in Truesdale, said the change would be a significant departure from the way sales tax has previously been handled in the state. 

Prior to the passage of SB 28, car buyers would receive temporary tags at the point of sale and had 30 days to register their vehicle with the state, where they would pay the sales tax. 

“We’ve never collected it at the dealer,” said Gastorf. “In fact, I think Missouri is one of the last states, I think it’s less than five, that don’t collect it at the time of sale, but the state has lost a ton of money on sales tax revenue from people not registering their vehicles or driving with expired tags.”

Once the changes are in effect, car buyers will receive a paper copy of their license plate at the point of sale, and will be mailed a metal license plate following their purchase, according to a press release from the Missouri Department of Revenue. 

“This change to the way we collect sales tax will eliminate temporary license tags, which rob the state of millions of dollars each year because of drivers who never pay their sales tax,” said Missouri Director of Revenue Trish Vincent in the press release.” Though the law goes into effect on Aug. 28, the sales tax changes cannot take effect until our new FUSION system is up and running.”

Gastorf said once the software was available, it was his understanding that the state would be training individual dealers on how to use it so sales tax is collected correctly. 

“There has been some communication between the state and the association of dealers on, whenever that FUSION software is available that they’re gonna use to implement this change, that there’s gonna be some kind of training program, or some way to set dealers up with here’s how we’re actually going to do this,” said Gastorf. 

He said while car buyers should be prepared for the changes, since they are already required to pay the sales tax it should not be a significant change. 

“I don’t think it’s anything to be scared of, I think people just have to be prepared that they need to have that money either with them, or figure out a way to pay for it,” said Gastorf. 

Gastorf said there will be a few different scenarios to how the sales tax is assessed depending on how someone is purchasing a car. 

He said with trade-ins, buyers will pay the sales tax on the difference between the value of their trade-in and the value of their new car. 

“So the car you’re buying is $30,000, and your trade is $10,000, you pay (sales tax) on the $20,000,” said Gastorf. 

He said in the case of loans and financing agreements, he would expect the bank to pay the sales tax to the dealer along with the cost of the vehicle. Sales taxes would be included in the buyer’s payments. 

He said while questions still remain about exactly how the process will work, he thought it would get smoother as his dealers become more familiar with the software, and he was going to do his best to keep his customers aware of the changes. 

“I think as we get to know the process and that software gets the kinks or bugs worked out, as the dealers get feedback, it’ll just get better, we’ll get smoother,” said Gastorf.