Cape Girardeau County may put use tax on ballot

Cape Girardeau County commissioners may decide as soon as Thursday whether voters will be asked to approve a use tax in November.

The commission plans to discuss a use-tax question at its meeting at 9 a.m. Monday at the county administration building in Jackson. A use tax in Cape Girardeau County would be equal to the 1 percent general sales tax the county collects, but would not be in addition to the sales tax. The use tax would replace sales taxes government officials aren't sure they'll be able to continue to collect on certain items bought beyond state lines or from someone who doesn't own a business.

Use taxes have been pitched, and in some cases successfully sold, by government officials as a way voters in Missouri's municipal governments can help local businesses and their local tax revenue stream.

Associate Commissioner Charlie Herbst said the commission has been exploring whether to ask voters to decide on implementing a use tax, in part by talking with area business organizations.

"I get the feeling local businesspeople do want to see [a use tax] because they want to see a more level playing field," Herbst said.

The idea held by local businesspeople who support a use tax, especially vehicle dealers, is people are crossing state lines to buy cars, trucks, boats and recreational vehicles so they can save on sales taxes. A 2012 state Supreme Court ruling disallowed sales taxes to be collected by cities and counties on vehicles bought out of state and other large purchases, such as construction materials. Government officials often say the taxes make up for lost revenue.

As a result of the ruling, Cape Girardeau County's estimated loss in sales tax revenue last year was $250,000 -- although the county was able to recently resume collecting the once-unchargeable taxes since Gov. Jay Nixon over the summer signed a law that allows collection but requires governments to hold elections about use-tax questions before November 2016.

Several area taxing bodies, including Perry and Bollinger counties and Perryville, put a use tax before voters in April, and the initiatives passed. A use tax also was pitched in Scott County, but rejected. Cape Girardeau County held off on placing a use tax question on the ballot because commissioners said more time was needed to research the best option for the county and to mount a voter-education effort.

Now Herbst said the commission is ready to talk about a use-tax question, and may hold a vote to place it on the ballot Thursday.

"There's nothing else on the ballot for November that we know of right now, so it's a good time to tell our story," Herbst said.

Another part of the county's story is commissioners voted to raise property taxes last September to partly make up for the revenue it couldn't collect on vehicle sales and other purchases because of the Supreme Court ruling. 2012 was the first year since 1982 the county had levied the tax, which state statute allows if counties cannot collect enough sales tax revenue to cover their budgets. The levy was set at 0.038 of a cent per $100 assessed valuation. Property owners are paying between $7 and $30 more per year as a result of the tax, equaling about $425,000 more in property tax revenue for the county annually.

The other part of the revenue picture, county officials say, was reimbursements for state services have dropped in recent years. That activity, coupled with flat sales tax revenue, caused the county's unencumbered balance to fall from about $1 million in 2008 to $154,000 in 2012. Without levying the property tax, the county projected the balance would have shrunk to less than $30,000 this year.

In July, commissioners said they were optimistic about the possibility of rolling back the property tax levy if sales-tax revenue returned to a normal level. This month's report from Treasurer Roger Hudson showed general sales tax revenue up 1.81 percent compared to the same time last year. The commission can vote to roll back the levy in September, but cannot vote to raise it. Raising a property tax levy can occur only during an assessment year.

eragan@semissourian.com

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