Area residents will likely be asked to vote on use tax

It appears residents of several area communities ó including Cape Girardeau and Jackson ó will be asked to vote on local use tax issues in November, allowing those municipalities to collect sales tax on purchases made through online retailers.

The Missouri General Assembly recently approved Wayfair legislation allowing municipalities to collect online sales tax equal to the sales tax rates in their communities, contingent on voter approval.

At their meeting Monday night, members of the Cape Girardeau City Council approved the first reading of an ordinance that would put the question on the ballot Nov. 2. The council is expected to vote on the second and final readings of the ordinance at its next meeting set for Aug. 2.

Also on Monday night, members of the Jackson Board of Aldermen reviewed a draft of the use tax ballot measure during their semi-monthly study session. The aldermen are expected to vote at either their Aug. 2 or Aug. 16 meeting to put the measure on the November ballot in Jackson. Tom Ludwig, who serves as Jackson city attorney, said the board has until Aug. 26 to decide whether to put the measure on the November ballot.

Cape Girardeau Mayor Bob Fox said it's his understanding the ballot issue is also being considered by the city council in Scott City.

If approved by a simple majority of voters in Cape Girardeau, a use tax would add 2.75% to online purchases made by city residents. In Jackson, approval of the measure would mean a 2.5% increase to the price of online purchases made by residents of Jackson.

Both percentages are equal to current sales tax rates in each community. The taxes would go into effect Jan. 1, 2023, pending voter approval.

"It's a matter of being fair to our local store owners who have to compete with somebody like Amazon, who is getting rich on behalf of our citizens and others around the country," said Fox, who estimated a local use tax will annually generate at least $3 million for the city.

"If you go back over the years, the amount would be astronomical," he said.

In Jackson, Mayor Dwain Hahs estimates a use tax on internet purchases made by Jackson residents will raise about $500,000 for the city annually.

Comments