Scott City makes changes to telecommunications tax rate

Tuesday, May 16, 2006

The Scott City Council voted 5-0 Monday night to adjust the city's gross receipts tax on telecommunication. The adjustment was made in order to comply with changes to the tax passed by the Missouri legislature last year.

Like many Missouri municipalities, Scott City charges a tax on telecommunications services as a percentage of the gross receipts companies report. In the past only traditional telephone services could be charged, but changes in state law effective July 1 allow cellular telephone service to be charged as well.

The tax is revenue neutral -- meaning municipalities cannot use the tax for a large jump in revenue when cellular service becomes taxable, thereby increasing the tax base. Last year Scott City received $15,577 from the tax.

To stay revenue neutral, the city council voted a change from the current 2.5 percent to 1.8 percent to stay in line with Missouri Department of Revenue requirements.

Council members Jeff Curnell, Robert Tyler and Kirk Lewis were absent.

The law instituting the new tax is currently under legal challenge, and Scott City's ordinance contained a provision to ensure if the law was defeated the city would revert to the old tax rate.

Public participation

Democratic candidate for Missouri's 161st representative district Steve Hodges visited the Scott City council Monday night in an attempt to reach out to the northern part of the 161st district.

Hodges is a former businessman from East Prairie.

msanders@semissourian.com

335-6611, extension 182

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