JACKSON VOTERS AMONG MANY IN STATE TO DECIDE LOCAL USE TAX LAW TUESDAY

JACKSON -- Voters here and in other communities around the state will decide whether or not to impose a local use tax in Tuesday's election.

In Jackson, a 1.5 percent tax is proposed. It would replace a portion of the state's use tax which was declared unconstitutional by the Missouri Supreme Court in March.

City officials say the local use tax will let Jackson businesses compete fairly with out-of-state industries, and most taxpayers won't notice the additional levy.

"It's not a detrimental tax, and it's not one they pay every day," Mayor Paul Sander said, adding, "99.9 percent of the people won't be affected by it."

The use tax would be levied on purchases made from out-of-state businesses or industries, including purchases of equipment by companies or catalog-type merchandise by individuals.

Only purchases totalling $2,000 or more would be subject to the tax.

The tax was originally imposed because businesses and individuals were buying supplies and items from out-of-state companies to avoid paying sales tax, and will not be levied on items purchased for resale.

Sander said the tax would help protect local businesses by taking the incentive away to buy from vendors outside the state.

He also pointed out the measure on Tuesday's ballot would merely replace an existing tax, not create a new one.

"It will be a revenue loss to the city if it doesn't pass," said City Administrator Steve Wilson.

The city has no mechanism to project how much revenue the tax would produce, he said, adding that it would depend on the total purchases made from Jackson businesses.

"My feeling is that we need to have some protection for our local businesses from out of state businesses, and in my mind that's the reason we put it on the ballot," Wilson said.

Jackson is one of several local governments, including the city of Cape Girardeau and Cape Girardeau County, that has joined in litigation against the Missouri Department of Revenue to prevent the state from reclaiming use tax revenues already disbursed.

At issue is whether or not the state has the right to demand those refunds, and also whether it can require municipalities to pay 12 percent interest on those revenues.

City officials say they're willing to repay the approximately $215,000 in use tax revenue the city has in escrow, but the interest is going too far.