CHARLESTON TO CONSIDER USE-TAX MEASURE

CHARLESTON, Mo. -- Voters in Charleston, Mo., will consider a tax proposal next month that would improve competition between local retailers and out-of-state markets.

Included on the Aug. 8 ballot is a proposal that residents who make major purchases through an out-of-state vendor be required to pay a 1.5 percent use tax. The purpose of the tax is to eliminate the sales tax advantage non-Missouri vendors have over local vendors.

Use-tax collections are monitored by the Missouri Department of Revenue.

City Manager David Brewer said state officials informed him earlier this year the city and county were "penalizing in-state businesses and encouraging people to go out of state" to make major purchases because the overall tax rate was cheaper.

Charleston residents currently pay a a total of 7.975 percent on all purchases, which includes a state sales tax of 4.225 percent, a county sales tax of 2.250 percent, and a city sales tax of 1.5 percent. The total tax rate is the second-highest in the state.

Should the proposal pass, residents making out-of-state purchases would pay 5.725 percent in sales taxes since there is no county use tax being collected. Missouri law forbids establishment of a use tax that is higher than the equivalent in-state tax.

In this proposal, the use tax cannot exceed the local sales tax of 1.5 percent and would rise, fall or be repealed in accordance with the local sales tax.

Brewer said he expects few local residents will be affected by the tax, which is only required of persons purchasing more than $2,000 in goods from out-of-state vendors within a calendar year.

"As a general rule this doesn't apply to the general citizen," Brewer said. "It evens the playing field so no matter whether you buy in state or out of state, the taxes you're going to pay in Missouri will be the same.".