Sikeston to put use tax on ballot

SIKESTON -- The Sikeston City Council unanimously voted Monday to put a use tax on the Nov. 5 ballot.

According to Sikeston City Manager Jon Douglass, the use tax is similar to a sales tax but is imposed on sales of goods from non-Missouri vendors that are intended for use, storage or consumption in Missouri. The tax is only imposed on sales that are not already subject to sales tax.

"This would level the playing field for vendors in Sikeston," Douglass said. "It will help capture revenues we've lost over the years and the rate would be equal to local rates."

More than 160 cities and 60 counties in Missouri have adopted a local use tax, including Scott County, New Madrid County, Cape Girardeau County and a number of nearby cities.

"This is not changing the tax rate in the City of Sikeston whatsoever," said Sikeston Mayor Steven Burch.

Over the last 15 years, taxable sales in Sikeston have increased by 11.2% and in the same time period, the cumulative inflation rate has been 31.4%. In the past four years since the new capital improvement sales tax has been collected, total sales tax collections have actually declined as more people have embraced online shopping, which is largely untaxed.

According to the U.S. Department of Commerce, 9% of all retail sales are now occurring online, up from 3% 10 years ago and if these sales involve out-of-state vendors, then the sales are not subject to local sales tax.

"The reality is that sales tax is 60% of the city's total revenue and that revenue remains flat and is on the decline in large part to people buying more across state lines than they used to," Burch said.

If the use tax passes by a simple majority in the Nov. 5 election it will take effect on Jan. 1, 2020.