Cities and counties around the state got an unpleasant jolt in March when the Missouri Supreme Court ruled the local portion of a state use tax unconstitutional.

On Tuesday, voters in 86 Missouri counties -- including Cape Girardeau, Scott and Perry -- will be asked to approve local use taxes to replace those the high court threw out.

The Supreme Court ruled that the local portion of the use tax was unconstitutional because it wasn't applied uniformly. In some counties or municipalities, the use tax on goods purchased out of state was higher than the local sales tax.

The basic state use tax of 4.225 percent is still being collected.

Legislation passed at the end of last session allowed cities and counties to go to the voters with use-tax proposals equal to their existing sales tax levies.

The tax would be applied only to annual purchases totalling more than $2,000. Entities and purchases exempt from local or state sales taxes also would be exempt from the use tax.

In Cape Girardeau County, three use-tax proposals are on the ballot: 1.75 percent in the city of Cape Girardeau, 1.5 percent in the city of Jackson, and 0.5 percent in the county.

If approved, Cape Girardeau City Administrator Michael Miller said, the local use tax will "create a level playing field for Missouri businesses."

Miller, speaking at the Cape Girardeau Chamber of Commerce's First Friday Coffee, said the state will collect local use-tax revenues and disburse them to local entities "at a slight fee."

Supporters say Missouri retailers lose out without a local use tax because businesses will buy supplies and equipment from out-of-state suppliers to save the cost of the tax.

According to the Missouri Association of Counties, which is backing local use-tax measures, $4.3 billion in out-of-state purchases were subject to the state's use tax last year.

Jackson Mayor Paul Sander said the local use tax isn't a new tax -- people have been paying it since it was levied by the state in 1992.

Local officials also say the hundreds of thousands of dollars in use-tax revenues raised for counties and cities will go a long way toward making road and bridge projects and other plans a reality.

In Cape Girardeau County, more than $800,000 in use-tax revenue was set aside for road projects and an addition to the juvenile detention center. Those plans have been put on hold.

But Associated Industries of Missouri -- whose four-year legal battle with the state resulted in the March court ruling -- argues that the local use tax unfairly targets businesses and industries.

They reason that any purchases by businesses over $2,000 would be quickly spotted

"It's a discriminatory tax on business because businesses are constantly audited," said Jay Wunderlich, AIM's executive director.

Individuals will "rarely if ever" pay the tax, he said. If they do surpass the $2,000 minimum they're unlikely to pay the use tax voluntarily, he said

The use tax amounts to "much more than the watered-down version of the catalog sales," Wunderlich said. It would also target computer purchases, office machines and other items businesses need and might not be able to find in Missouri.

AIM isn't campaigning against the local use tax because the enabling legislation met the objections the association raised in its original litigation, Wunderlich said.

It puts the local tax to a vote of the people and it requires local use taxes to be equal to local sales taxes.

"We're out of it," he said. "We're leaving it up to the local vote. We'll support whatever the voters decide."

Local officials say they can't project how much revenue the use taxes will produce.

"There are a lot of unknowns on that issue," said Jackson City Administrator Steve Wilson. "It will be a revenue loss to the city if it doesn't pass."

The local taxes probably won't produce as much as the old statewide tax did, Cape Girardeau County Auditor Weldon Macke said, because the pool of tax revenues will be smaller.

"They just did it on a statewide basis and divided it up against your sales tax," he said.

County and city officials are still waiting for word on whether they will have to refund revenues received through the old use tax.

Several lawsuits are pending against the Missouri Department of Revenue after the agency demanded the refunds -- plus 12 percent interest, a figure Miller called "usurious."

Local officials have said they don't mind repaying the tax revenue itself, but asking for interest is going too far.

USE TAX

The following Southeast Missouri cities are among those in the state also asking for approval of a local use tax.

1. Ste. Genevieve County

Ste. Genevieve

2. St. Francois County

Bonne Terre

Farmington

Desloge

Park Hill

3. Madison County

Fredericktown

4. Perry County

Perryville

5. Cape County

Cape Girardeau

Jackson

6. Scott County

Sikeston

Benton

Miner

Chaffee

Oran

Scott City

7. Stoddard County

Advance

Bell City

Bernie

Bloomfield

Dexter

Dudley

Puxico

8. New Madrid County

Sikeston

Marston

Parma

Lilbourn

Howardville

New Madrid

9. Pemiscot County

Caruthersville

Haiti

Steel

10. Carter County

11. Ripley County

Doniphan

Naylor