Chambers of commerce: Use tax belongs on April ballot

Executives of area chambers of commerce on Monday gave the Cape Girardeau County Commission the prompt it had been waiting for to consider placing a use tax on the ballot in April.

John Mehner, president and CEO of the Cape Girardeau Area Chamber of Commerce, and Brian Gerau, director of the Jackson Area Chamber of Commerce, told commissioners during their regular meeting that boards of directors for both organizations feel a use tax will be in the best interest of the business community.

"Both of our chambers have always carried the flag on supporting our local businesses," Gerau said of the Jackson chamber's support for passage of a local use tax. "This really falls within the mission of chambers of commerce ... leveling that playing field and making sure we support our businesses in this area."

The commission set a public hearing on the use tax proposal for 9:30 a.m. Jan. 13 at the county administration building in Jackson. A use tax in Cape Girardeau County, if passed, would be charged at 1 percent on certain purchases.

About 60 Missouri local municipalities have a use tax, which can be collected by the Missouri Department of Revenue on purchases of any type of titled vehicle and some other buys, such as construction materials, which are bought out of state but then brought to Missouri for use. The department of revenue distributes the tax revenue to local governments that have a use tax in place. The amount of a local use tax is always equal to the amount of a government's general sales tax. The state also has a use tax of 4.225 percent equal to state sales tax.

In just a little more than a year, voters in all counties that border Cape Girardeau County, including Bollinger, Perry, Scott and Stoddard, have passed a use tax at the polls after chambers of commerce and government officials worked together to campaign for their passage, citing fairness to local businesses. Use taxes have also passed in some cities, such as Perryville, and now Cape Girardeau and Jackson voters may also see a use tax question on the ballot in the spring.

Waiting on word

Commissioners have said they have been waiting for the local chambers to send word of the business community's support for a use tax before moving to place a question on the countywide ballot. Mehner has now notified city officials in Cape Girardeau and Gerau has notified officials in Jackson of the organizations' stance on use taxes in hopes of having ballot questions also go before city voters in April.

"From a chamber of commerce standpoint, it's really a real simple thing to support, because when people buy things, tangible, personal, usable property and use them in this area from local businesses, they are required to pay taxes on things that are taxable," Mehner told the commission Monday. "Without a local use tax in place, when local people take their money outside of this area, and purchase those same types of products, they are not charged a sales tax where they purchased them from."

Mehner added that the situation that was seen with taxes in Missouri from 2012 into 2013 -- where local governments could not collect sales taxes on out-of-state purchases -- acted "as an incentive for people to purchase products outside of this area. It can give businesses outside our area that sell the same products a slight advantage," he said.

Governments could not collect the taxes for a time as a result of a Missouri Supreme Court ruling that stopped collection on out-of-state purchases. Cape Girardeau County was estimated to lose about $250,000 in sales tax revenue because of the ruling. A bill signed by Gov. Jay Nixon over the summer allowed governments to again begin collecting taxes on those purchases, but the measure also stipulates a use tax question must go before voters at an election and pass before November 2016 if the collection is to continue.

The commission must vote on whether to place a use tax question on the ballot.

eragan@semissourian.com

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