First use-tax receipt of $19,444 smaller than anticipated

Cape Girardeau County collected a total of $19,444.51 in use-tax revenue this month, its first collection since the county began collecting the tax in July.

Voters narrowly approved the measure that allowed the county to levy a 1 percent use tax in April, and use tax collections began in July.

Revenue from the use tax will fund construction of a new county courthouse that will house court proceedings and county offices.

The first collection was smaller than county officials anticipated, said Associate Commissioner Charlie Herbst. County Treasurer Roger Hudson talked to people at the Missouri Department of Revenue, who said the first month of collection is typically low.

There are several factors that contribute to the low initial collection, Hudson explained.

"You don't have any of the late payers' cycle -- like, every month you'll start getting people that paid late and get the previous month's late payment -- and I'm not sure everybody's got their tax tables up to date," he said. "And a lot of this use tax from out of state, it's submitted quarterly, so it really needs to go through a quarterly cycle or two quarterly cycles before you know what you're getting regularly."

Hudson said use-tax collection probably will get to the point where it's "somewhat predictable," likely after a few months. It's hard to compare use tax to other more-stable taxes.

"It's an economic activity tax," he said. "It's something that can happen and then not happen again. It's actually something that requires somebody to do something, unlike a property tax that's going to happen every year. It's just not quite as reliable."

The Missouri Department of Revenue defines use tax as a tax "imposed on the storage, use or consumption of tangible personal property in this state." Among the items to which the tax applies are titled vehicles -- including automobiles, boats and other recreational vehicles -- bought out of state.

Consumers are required to file a use-tax return with the state department of revenue if untaxed purchases from out-of-state vendors in a calendar year equal more than $2,000.

Among the activities that could cause a county to experience a boost in sales tax revenue is construction. If a major private construction project happened in the county, it would receive use tax applied to all of the out-of-state materials purchased.

Despite the fluctuation, the county still is hoping annual income from the use tax falls in the range of $800,000 to $1.2 million, Hudson said. The county will be paying close attention to the annual income, because it will be the most important figure for determining bond financing for the new courthouse.

"It will take a good 12 to 18 months of collecting that revenue to have a nice base of how much that money is in an annual period of time," Herbst said. "... And I would believe that any bond company would want to see 12 to 18 months of collection before they would sell the bonds to build the project. They would want to know the revenue is there to satisfy the bond payment."

In about a year, he said, the county could begin the early planning for the new courthouse, with input from the public and groups involved in the courts system.

srinehart@semissourian.com

(573) 388-3641

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