Cape approves holiday for sales taxes

Shoppers will get a tax break under a state sales tax holiday that received unanimous backing of the Cape Girardeau City Council on Monday.

"I think it's pretty clear the council wants to do whatever we have to do to stimulate sales tax revenue," Mayor Jay Knudtson said.

At the same time the council tabled a nearly 3 percent increase in spending requested for the Cape Girardeau Convention and Visitors Bureau for the coming fiscal year because of concern over proposed salary increases for the CVB at a time when the city is facing a budget crunch.

Knudtson suggested the city council may want CVB employees to receive salary increases only if and when city employees get pay raises.

As to the sales tax holiday, the council unanimously voted to suspend the 2-cent city sales taxes on back-to-school supplies and computers on Aug. 13 through Aug. 15. State sales tax also will be suspended that day throughout Missouri as a result of a state law, assuring shoppers locally of a savings of more than $6 on a $100 purchase.

The council discussed the issue at length in two previous council meetings dating back to last month. Initially some council members, including the mayor, said they were reluctant to suspend the city sales taxes at a time when the city is asking voters on June 8 to approve a new quarter-cent sales tax.

But business leaders including the chamber of commerce board of directors predicted the sales tax holiday would boost sales of all merchandise, including items that will be taxed that weekend.

Knudtson said the council legally only had to act if it wanted to opt out of the sales tax holiday, but decided to take action to make its position clear to the business community and the public.

The mayor said the holiday's success depends on how well local retailers market the tax break.

CVB salaries

As to the CVB budget, council members said they were reluctant to approve the proposed $489,300 budget because it included a 2.5 percent increase in salaries at a time when city employees aren't receiving pay raises.

CVB director Chuck Martin said the increase includes expanding the bureau to four full-time staff members, a point not reflected in the document presented to the city council.

The Cape Girardeau Chamber of Commerce operates the CVB with city motel and restaurant tax revenue under a contract with city government. CVB employees work for the chamber.

But council members said it wouldn't look right for the city to allow pay raises for CVB staff right now.

"I don't think it would bode well to do something like that," Councilman Jay Purcell said in the study session before the regular meeting.

Council members said they have time to act on the issue because the new fiscal year doesn't start until July 1.

mbliss@semissourian.com

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