Same jurisdictions again forgoing sales tax holiday

JEFFERSON CITY, Mo. -- None of the 179 Missouri cities and 66 counties that sat out last year's statewide sales tax holiday will be participating when shoppers get their second three-day tax break Aug. 5 to 7.

Most Southeast Missouri cities and counties, however, are locked into participating. And even in jurisdictions where local sales taxes will be charged, the state's 4.225 percent levy will be lifted.

Legislation signed into law earlier this month to make the tax holiday a permanent annual event allows only those jurisdictions that opted out of participation last year to do so this year. The legislation gave them the option of participating, but by the time Gov. Matt Blunt signed it, the deadline for taking actions necessary to do so had past.

Southeast Missouri cities not participating are Caruthersville, Charleston, Dexter, Kennett, Poplar Bluff, Doniphan, New Madrid and Ste. Genevieve. Also sitting out are Mississippi, New Madrid, Ste. Genevieve and Stoddard counties.

Starting next year, all cities and counties, including those participating this year, will have the ability to opt out under the law. Missouri Municipal League spokeswoman Tracy Weddle said some cities that previously participated have expressed frustration that the legislature didn't give them a choice this year.

"There are a few cities that wish they had a chance to opt out because the costs were higher than they thought," Weddle said. "I think the ones that opted out last year are happy they can opt out this year."

Cost Cape $50,000

Fear of losing tax revenue needed to support government services is the primary reason cited by jurisdictions that have chosen not to participate. Cape Girardeau city officials estimate the previous holiday cost it $50,000 in lost revenue.

Missouri Chamber of Commerce and Industry spokesman Jeff Craver said his group is hopeful public pressure will nudge local elected officials toward greater participation in 2006.

"Next year, hopefully, we'll get everyone to participate," Craver said. "That would be ideal."

When Missouri tried holding a tax holiday for the first time in 2005, there was some confusion as to what goods were tax exempt, which caused some headaches for retailers.

"The main frustration was establishing which items were subject to the holiday and which were not," Craver said. "That, hopefully, will be a one-time problem because the items subject to the holiday have not changed."

Craver said most retailers reported that any drawbacks to implementing the holiday were outweighed increased consumer traffic and the accompanying boost in overall sales.

Taxes won't be charged for purchases of up to $100 for clothing, $50 for school supplies, $350 for computer software and $3,500 for computer hardware. Consumers, however, can make purchases up to those caps multiple times by visiting different stores or making separate trips to the same store.

Although a Chamber of Commerce study released in March concluded that last year's tax holiday helped boost overall revenue for cities by increasing spending on non-exempt items, including meals and entertainment, a Missouri Department of Revenue spokeswoman said the agency's own analysis of the holiday's effects proved inconclusive.

mpowers@semissourian.com

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