Navigating Missouri’s Tax Terrain: A Moving Experience!
In March 4, 2019, I moved to Missouri from the Golden State of California to start my life over and get my mental health and life back on track. Here I am four years later still trying to understand the way this State runs on taxes.
In March of 2023, I spent two weeks getting the runaround on my taxes between the Department of Revenue to the DMV, to the license office, to the County Assessor’s office.
I had been involuntarily juggling between my sanity and pulling my hair out when I realized that this would be a prime opportunity to take note about what NOT to do when you move to a new place and make a new purchase.
I don’t know about other States, but in the State of Missouri, the cost-of-living might be low, but the taxes are outrageous.
In 2020, I unintentionally bought a new 2019 Jeep Compass. I traded in a 2012 Fiat 500 for a more sturdy, winter getup only because my car was starting to give me problems that left me mechanically stumped.
I had taken my former car in to the dealership thinking that they could help me resolve the problem only for them to come back and tell me that they could not find anything wrong with it even though I had stated that it would shut down randomly while out driving.
Instead, I got sold into a new car and got hit with a hefty tax bill and registration fees up the yin yang. Fast forward over two years later with a new move into my new place and I found that not only did I have a delinquent tax fee from 2021 that I owed the Department of Revenue DMV bad debt department, but I also found out that I owe property taxes on my Jeep from 2021 and 2022 to the County Assessor. All in all, I’m looking at an expense of $2,000 U.S. Dollars in property tax fees. Yikes!
On top of that, I was notified in the mail about owing taxes for 2018. I wasn’t even here in 2018! I had to provide doucmentation to the MO Tax Revenue Department and inform them that I was living in California at the time. That way, I did not owe for 2018.
Having experienced this headspin of a dilemma, I decided to create a guide for others who may consider a move out-of-State to Missouri.
In the State of Missouri, assessing property tax is usually calculated by the current rate of the market based on the property and its value (cars, trucks, boats, RVs, etc.) using the National Automobile Dealers’ Association (NADA) Official Used Car Guide rating system.
In other words, Estimated NADA value * percentage value of assessment rate * percentage value of tax rates (Source: Fox2Now, 2023).
Property Taxes
Missouri property taxes can vary depending on the location and value of the property, as well as the tax rates set by local government entities. I live in a county with higher tax rates due to living in a university town. Not as high as some place like, you know, Los Angeles, but still pretty high compared to other surrounding areas.
Here are a few factors that may contribute to why some people perceive Missouri property taxes as expensive:
- High property values: If a property has a high assessed value, the property taxes will naturally be higher. In some areas of Missouri, particularly in urban and suburban areas with strong housing markets, property values may be higher than in other parts of the state, which can contribute to higher property taxes.
- Multiple taxing entities: Missouri has a complex system of property taxes, with taxes assessed by multiple entities, including county governments, school districts, and municipalities. This can lead to higher overall property tax bills, as each entity sets its own tax rate and collects taxes independently.
- Limited tax relief programs: Missouri has some property tax relief programs available for certain groups, such as seniors and disabled individuals, but these programs may be limited in scope or difficult to qualify for. This can leave many property owners without much relief from high property taxes.
Overall, Missouri property taxes may be perceived as expensive due to a combination of factors, including high property values, multiple taxing entities, and limited tax relief programs. However, it’s important to note that property taxes can vary widely depending on the location and specific circumstances of the property owner, so it’s important to consult with a local tax professional for specific advice.
Planning A Move to Missouri: Tips to Avoid Surprises
If you’re planning on moving to Missouri, here are some tips to help you avoid surprise taxes and fees:
- Research the local tax rates: Before you move to Missouri, research the local tax rates in the areas you’re considering living in. This includes property taxes, sales taxes, and any other taxes that may be applicable. You can find this information on the websites of the relevant state and local government agencies.
- Understand the cost of living: Missouri has a relatively low cost of living compared to many other states, but costs can still vary depending on where you live. Research the cost of living in the areas you’re considering to get a better sense of what to expect in terms of housing, food, and other expenses.
- Consider the impact of state and local regulations: Missouri has a number of regulations that may impact your daily life, such as restrictions on smoking in public places or certain zoning laws. Make sure you understand these regulations before you move to Missouri. Hunting in Missouri? Know before you go.
- Know your rights as a tenant or homeowner: If you’re renting or buying a home in Missouri, make sure you understand your rights and responsibilities as a tenant or homeowner. This includes understanding the terms of your lease or mortgage agreement, as well as any relevant state or local laws.
- Seek professional advice: If you have questions about taxes, fees, or other financial matters related to your move to Missouri, consider seeking the advice of a financial advisor or tax professional. They can help you understand the potential costs and risks associated with your move and provide guidance on how to minimize them.
Financial & Tax Professionals That Can Help You
To get comprehensive advice on the potential costs and risks associated with a move to Missouri and how to minimize them, you may want to consult with a qualified tax professional or financial advisor. Here are the types of professionals who can assist you:
1. Certified Public Accountant (CPA):
CPAs specialize in accounting, taxation, and financial planning. They can provide insights into the tax implications of your move, including state-specific taxes in Missouri. CPAs are knowledgeable about both personal and business finances.
2. Enrolled Agent (EA):
EAs are tax professionals authorized by the U.S. Department of the Treasury. They specialize in tax matters and can represent taxpayers before the Internal Revenue Service (IRS). An EA can offer guidance on tax planning and compliance.
3. Financial Planner or Advisor:
A financial planner or advisor can help you create a comprehensive financial plan that considers the costs and risks associated with the move. They can address investment strategies, retirement planning, and overall financial well-being.
4. Tax Attorney:
If your situation involves complex legal and tax issues, consulting with a tax attorney may be beneficial. Tax attorneys specialize in tax law and can provide legal advice related to your move and financial matters.
5. Relocation Specialist:
Some financial advisors specialize in relocation planning. They can help you understand the financial implications of moving, including housing costs, tax considerations, and potential adjustments to your budget.
When selecting a professional, it’s essential to consider their expertise, credentials, and experience in dealing with relocations and state-specific financial considerations. Additionally, ensure that they are familiar with the tax laws and regulations in both your current location and Missouri to provide accurate and tailored advice.
Pros & Cons Moving from California to Missouri
Pros:
1. Affordable Cost of Living:
Missouri boasts a still very affordable cost of living, making it an attractive option for residents. There are ample opportunities for employment in sectors like Health Care, IT, and Education.
2. Diverse City Options:
Kansas City and St. Louis are the two prominent urban centers, providing a variety of job opportunities. Springfield offers a smaller, more intimate setting, while Columbia is known for its vibrant college town atmosphere.
3. Political Diversity:
The state caters to a range of political ideologies. If you lean liberal, the larger cities like KC and St. Louis may be appealing, whereas conservative individuals may find smaller counties outside the metro areas to be a good fit.
4. Rural Charm of the Ozarks:
Southern Missouri, particularly the Ozarks region, offers a rural setting with affordable land. However, services in this area may be limited.
5. Lake of the Ozarks:
A popular summer destination, Lake of the Ozarks is a large manmade lake that attracts retirees. It offers a scenic and recreational environment.
6. Friendly Community:
Missouri is known for its friendly residents, especially if newcomers embrace the local culture without trying to impose changes.
7. Employment Opportunities:
Major metro areas in Missouri boast a healthy job market, though employment options may decrease in rural areas.
Cons:
1. High Crime in Cities:
Both Kansas City and St. Louis face higher crime rates, requiring residents to be vigilant and aware of areas to avoid. This is a common challenge akin to metropolitan areas like San Francisco or Los Angeles.
2. Commute Challenges:
While traffic is comparatively better than in California, there is still a commute to and from metro areas on workdays.
3. Varied Weather:
Missouri experiences four distinct seasons. Winters can get cold, with temperatures dropping as low as -10°F. Summers are hot and humid, while spring and fall, though beautiful, tend to be short-lived. Adapting to the seasonal changes is essential for residents.
By taking the following steps, and understanding the pros and cons, you can help avoid surprises and make your transition to Missouri as smooth as possible.
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