City may halt participation in sales-tax holiday

Cape Girardeau could cease its participation in the annual Back to School sales-tax holiday by a vote by the city council Monday night, but Mayor Harry Rediger said Friday he isn't likely to support a change.

The council brought back the sales-tax holiday in 2013 with a unanimous vote in favor of its reinstatement, brought on by Rediger's encouragement. Before 2013, the city hadn't participated in the sales tax holiday since 2008.

The state's annual tax-free weekend, set for Aug. 7 through 9 this year, exempts certain purchases from the state's 4.225 percent sales tax, and it allows counties and cities to decide whether to nix local sales taxes during the same period. Computers, school supplies and clothing are among tax-exempt items.

The city is looking at the issue because of the loss of tax revenue.

In documents prepared for Monday's meeting, staff reported the city has lost about $20,550 in each of the past two years for its general fund and additional revenue for its public safety trust fund, capital improvement sales tax fund, transportation trust fund and park and stormwater sales tax funds. The city's sales tax is 2.75 percent.

Rediger, a retired businessman who managed the Cape Girardeau J.C. Penney store for over 20 years, said he will need to weigh the benefit for the city against the benefits for shoppers and retailers, but he is likely to oppose a change Monday.

"As an old retailer, we don't need to be going back and forth," Rediger said. "I said when we changed this a few years ago, I wanted it to be consistent. I'll probably be supporting to stay with it."

Rediger said in 2013 the city council's decision on the sales-tax holiday -- whether to allow the city to participate -- needed to stand for the long term.

The mayor said the city is facing a tight budget while looking at costs associated with offering more competitive salaries, so he wants the sales-tax holiday to be discussed during Monday's study session. Participation by the city was first discussed at the council's annual retreat in April, according to council documents.

To opt out of participation this year, the council will have to pass an ordinance Monday as an emergency measure because of the date required to report to the Missouri Department of Revenue.

Cape Girardeau County, which charges a 1 percent sales tax, is participating in the holiday, county commissioners decided earlier this month.

eragan@semissourian.com

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Pertinent address:

401 Independence St., Cape Girardeau, MO