BUSINESS HOPES TO RECLAIM TAX MONEY

Audry Eldridge of Jackson is not in favor of the use tax that voters will decide on in November.

He says he's still dealing with the last one.

Eldridge is the owner of Midwest Sterilization Corp., which sterilzes medical equipment, and he has been paying the use tax for years.

When the Missouri Supreme Court declared the previous use tax unconstitutional in March, Eldridge breathed a sigh of relief.

When the Department of Revenue said that they would be collecting the money from the counties for redistribution to the business people who had paid it, he was elated.

"It's my money," he said. "The Supreme Court said the use tax was illegal. I should be able to get it back."

Unfortunately for Eldridge, it's not that simple.

Several of Missouri's counties, including Cape Giardeau County, have joined together and filed a lawsuit in protest. They don't want to dip into their coffers and repay money that, in many cases, has been bugeted or already spent.

An injunction has been granted until the matter can be settled in court.

In fact, until the lawsuit was filed, the department was asking the counties to pay back the use tax and a 12 percent interest fee that would be returned to the businesses.

Eldridge found that ironic.

He bought his business in 1984 and was told that, like hospitals, he wouldn't be responsible for the use tax. He endured a tax audit three years later and auditors told him he was.

The state made him pay back the taxes for the previous three years. In addition, he was penalized with a 25-percent fine and 12 percent interest on all of the taxes due.

"They're being asked to pay back taxes for the same number of years as I was and the same interest," he said.

And for nearly 10 years, Eldridge has paid 1.5 percent use tax on his out-of-state purchase of sterilizing chemicals.

Midwest Sterilizing spent a pretty penny each year on the use tax. Now, if all goes well, he hopes to get nearly $20,000 in tax money back.

And regardless of how that turns out, he hopes the use tax won't be reimplemented in the fall after the election.

The tax would require businesses purchasing raw materials from out of state to pay a tax on the materials. Likewise, businesses from out of state buying materials from Missouri would pay the tax, too.

Sixty to 70 percent of all medical products in U.S. are sterilized using a chemical called ethylene oxide. Eldridge spends $30,000 a month on the chemical and he has no desire to pay a 1.5 percent tax on that.

The chemical can only be purchased from one place in the U.S. -- South Carolina.

And Eldridge feels it wouldn't be fair to make businessmen like him pay the tax.

"I have no choice but to buy it out of state," Eldridge said. "I'd love to be able to buy it here, but I can't."

Most of his services are for companies out of state as well.

"People in the community were paying that money," Eldridge said. "I don't think it's fair."

County officials say that having a use tax is fair, since it only affects those who don't pay regular state taxes for their goods or services.

County Commissioner Larry Bock said that, while he thinks the use tax is a good idea, it is ultimately the voters' decision.

"Let the people talk," he said. "If they don't feel it's fair, let them decide."

As far as Eldridge is concerned, Bock said that the use tax was just a cost of doing business.

"It's one of his expenses," said Bock. "Like any other business, he's just got to pass the cost along to the customer."

Another local business, Spartech, is looking to claim some of its paid use-tax money as well.