Most area governments locked into sales tax holiday

Missouri will hold its second sales tax holiday this August and most Southeast Missouri cities and counties will be required to temporarily suspend their levies.

Last year's holiday garnered rave reviews from shoppers and businesses. The 2003 state law establishing the one-time event, however, allowed cities and counties to opt-out of waiving their local sales taxes. Sixty-six counties and 180 cities took advantage of that provision to avoid losing revenue.

Under a bill Gov. Matt Blunt signed into law Wednesday that makes the tax holiday an annual event, only those jurisdictions that didn't participate last year will be allowed to sit out the 2005 holiday, which will be held from Aug. 5 to 7.

As a result, Cape Girardeau, Scott, Perry and Bollinger counties and all of the cities within those counties that charge sales taxes are locked in to waiving their taxes this time. Even in places where local governments opt out, however, the state's 4.225 percent sales tax still will be lifted.

Cape Girardeau city manager Doug Leslie said the city lost an estimated $50,000 in tax revenue from last year's holiday. Based on that loss, Leslie said the city council would have taken a serious look at sitting out this time had the Missouri Legislature given it a choice. The new law, however, will allow all local governments to opt out in 2006 and future years.

Depending on how this year's holiday affects the city, Leslie said the council may decide not to participate next year.

"It will be something we'll be watching closely," Leslie said. "We feel like we lost a fairly significant amount of revenue due to the holiday."

Southeast Missouri cities that retain the option of sitting out again this year include Caruthersville, Charleston, Kennett, Poplar Bluff, Dexter, New Madrid and Ste. Genevieve. Area counties that can take a pass include, Mississippi, New Madrid, Stoddard and Ste. Genevieve. Despite the exemption, any of those jurisdictions can choose to participate this year.

The waiver on sales taxes applies to clothing, school supplies and personal computers and software.

The bill is HB 64.

mpowers@semissourian.com

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