COUNTY, CITY WILL VOTE ON USE-TAX ISSUES

A half-cent use tax will go before Cape Girardeau County voters and a 1.75-cent use tax will be put before Cape Girardeau city voters Aug. 6.

The Cape Girardeau County Commission and Cape Girardeau City Council decided Monday to submit the proposals to voters.

In March, the Missouri Supreme Court tossed out the 1.5 percent portion of the tax allotted for local governments, saying it was unconstitutional because it could not be applied fairly. In some communities, the use tax -- imposed on purchases of merchandise or materials bought from businesses outside the state -- was higher than the sales tax imposed within the community, and could inhibit interstate commerce.

"It's just like a sales tax for out-of-state purchases," county Presiding Commissioner Gerald Jones said. "It levels the playing field" for local merchants and suppliers.

The 1.75-cent city tax would apply to purchases made by Cape Girardeau individuals and businesses who bought merchandise outside the state. Because of an exemption on the tax, most individuals wouldn't be affected.

Cape Girardeau city finance director John Richbourg said the Missouri Department of Revenue didn't have any projections on the per-capita use tax figure, so he isn't sure how much money the tax would generate for the city's general fund.

The use tax was originally imposed to make up for sales-tax revenues lost on out-of-state purchases, and applied mostly to catalog purchases and large purchases of raw materials and components by manufacturers.

In Jackson, aldermen were expected to discuss putting a use-tax measure on the ballot as well, said city administrator Steve Wilson. If aldermen agree, voters will be asked to approve a 1.5-cent tax.

A bill signed into law last month by Gov. Mel Carnahan allows county and municipal governments to ask voters to reinstate the tax.

The law stipulates that the use tax must be levied at the same amount as the local entity's sales tax. If the sales tax goes up or down, the use tax must change accordingly.

Purchases under $2,000 a year would be exempt from the tax.

"It's a tax that's been in place. It doesn't affect the average guy," Wilson said. "It doesn't affect the guy who orders from L.L. Bean."

County Auditor Weldon Macke said he can't predict how much revenue the use tax would raise, if approved by voters.

"You don't know until the receipts come in," he said, because it would depend on the purchases made.

Commissioners also heard an update on the county's tussle with the Missouri Department of Revenue on refunding use-tax revenues collected.

Cape Girardeau County and several other local governments have been invited to join St. Louis County and St. Louis City in a lawsuit against the state, county Prosecutor Morley Swingle reported.

Swingle told commissioners that lawyers for St. Louis City and County are looking for "a variety of information" from different plaintiffs to help show the impact losing the use-tax revenues is having on municipalities.

Commissioners agreed they will provide whatever support is necessary for the lawsuit.

The state notified local governments that it will start withholding sales tax revenues this month to make up for use-tax revenues disbursed plus 12 percent interest. That money will be pooled to help pay refunds applied for by businesses or individuals who had to pay the use tax.

But a strong case can be made against granting those refunds, Swingle said.

"You are not automatically entitled to a refund just because the law's been declared unconstitutional," he said. "In fact, the presumption is against refunds, because the entity may have already spent the money."

The Missouri Revenue Department is apparently acting against that presumption, he said.

Swingle said he met with counselors for several local governments last week to discuss the refund issue.

Cape Girardeau County's share of the use tax, collected from October 1992 to March 1996, totals $837,339, plus approximately $300,000 in interest. The revenue was set aside because there were concerns that the use tax might be questionable, but it was earmarked for upgrading the juvenile detention center and for road improvements projects.

Some information for this story was provided by Heidi Nieland of the Southeast Missourian.