Cape mayoral candidate calls for sales tax holiday participation

Cape Girardeau should participate in the back-to-school sales tax holiday despite its cost to help families and reward out-of-town shoppers, mayoral candidate Matt Hopkins said Wednesday.

Hopkins, a former city councilman, faces retired businessman Harry Rediger in the April election. The winner replaces incumbent Mayor Jay Knudtson, who is being forced out by term limits.

Rediger said he wasn't ready to take a stand on the tax holiday until he did more research. "I don't know what the numbers were, the difference with it on or with it off," he said.

Harry Rediger, candidate for mayor of Cape Girardeau (Kristin Eberts)

The city did not participate in the sales tax holiday last year, the first time since the holiday was enacted in 2005. The Cape Girardeau City Council decided against taking part to shore up a shaky budget.

Hopkins called for renewal of the city's participation Tuesday evening as he closed out a forum for municipal candidates sponsored by the League of Women Voters. In an interview Wednesday, he said that the city loses business to other communities by refusing to take part.

Not participating also sends a message that the city is trying to squeeze every possible penny out of taxpayers, Hopkins said.

"There were other communities near us that did participate, and they saw their stores do very well," Hopkins said. "It is very critical as a regional hub so that people will want to come to Cape. That is a way of saying thanks for coming to Cape Girardeau, and it won't impact us negatively."

Finance director John Richbourg estimated lost sales taxes totaled $37,444 to $71,088 when the city did participate. The city collected $29,371.65 on sales of items that would otherwise be exempt in 2009. The tax-free list includes clothing, school supplies and computers up to $1,500.

The city also has found that at least 15 retailers did not complete their tax returns correctly, Richbourg said, including some of the city's biggest stores. One retailer alone misreported $3,133.74 in taxes that the city should have received last year, he said.

If all last year's outstanding tax can be collected, Richbourg estimated the city will have received $60,000 in sales tax revenue. The difficulty in collecting, he said, will be convincing the state Department of Revenue, which collects and distributes sales taxes, to make the corrections. That would mean taking revenue from other entities that have already received it, Richbourg said.

By comparison, the city's 1 percent general revenue sales tax brings about $8.7 million per year. Jackson and Cape Girardeau County took part in the tax holiday last year. In Cape Girardeau, shoppers paid 2.75 percent city sales tax rather than the 7.975 percent combined rate for city, county and state sales taxes.

Rediger, who retired as manager of the J.C. Penney store in Cape Girardeau, said the holiday may shift sales rather than generate new business.

"It isn't all just new business, but it does save the consumer some money," Rediger said. Rediger said his attitude about the holiday may be decided by how much it costs the city to participate.

Cities, counties and other districts imposing sales taxes must decide by mid-June each year whether they will take part.

A sales tax holiday for the first $1,500 on purchase of energy-efficient appliances will take place from April 19 to 25. Jackson and the Town Plaza Community Improvement District in Cape Girardeau are participating. No other area taxing jurisdiction is taking part.

rkeller@semissourian.com

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Pertinent address:

401 Independence St., Cape Girardeau, MO