Cape Council scraps use-tax measure for now

Cape Girardeau city officials have scrapped the idea of putting a use-tax measure on the April ballot, preferring instead to see what the state Legislature might do to tax online sales.

At Monday�s study session, council members agreed with city staff it makes sense to see whether lawmakers will establish a process allowing the state and local governments to levy sales taxes on online purchases.

City manager Scott Meyer said the council would have had to start the process next month to put a tax issue on the April ballot.

In April, council members and city staff discussed placing a use-tax measure on the ballot next year while eliminating a quarter-cent capital improvements sales that expires at the end of 2019.

City officials have said a use tax on out-of-state purchases would equal the total city sales tax rate charged on purchases made at Cape Girardeau stores.

Meyer told the council Monday a use tax could generate $2 million to $2.5 million a year for the city government.

Retail sales-tax revenue has been flat in recent years largely because more people are buying items online, he said.

In June, the U.S. Supreme Court in a 5-4 decision overturned a pair of decades-old decisions that made it difficult for states to collect sales tax from online businesses that didn�t have a physical presence in their states.

As a result of the ruling, states can pass laws requiring out-of-town sellers to collect sales taxes.

How that affects Cape Girardeau and other cities in Missouri depends on what, if any, legislation on this issue is passed in the 2019 session, Meyer said.

Legislation could eliminate the need for cities to impose use taxes, city officials said earlier this year.

At this point, it is unclear what legislation may be proposed to collect sales taxes from online purchases, Meyer told the council.

�There are so many questions on this,� he said.

Cape Girardeau voters twice defeated use-tax measures in the last four years.

Meyer said a use tax is difficult to explain to voters. It would be even more difficult to go to the voters in April with the added uncertainty of what legislators may or may not do to address the tax issue, he said.

In addition, the Cape Girardeau School District may place a bond issue on the April ballot.

�We would be competing with that,� Meyer said.

The city manager said the council could wait until the legislative session ends in May and then consider whether to place a tax issue on the August or November 2019 ballot.

Other business

• At Monday�s meeting, the council also heard from developer Brandon Williams regarding his plans to construct homes and duplexes on property west of Old Hopper Road and south of Hopper Road.

Williams said he plans to build duplexes for older residents on an 18.5-acre tract bordering Old Hopper Road if the council rezones the property next month. He said the development would be similar to the Villas of West Park subdivision along Bloomfield Road.

As for acreage at the corner of Hopper and Old Hopper roads, Williams said he intends to build single-family homes.

�Whatever homes we build are going to be very nice,� he told the council.

He said he has no plans to construct rental homes in that area.

• At the regular meeting, the council awarded a $121,000 contract to Nip Kelley Equipment Co. to construct sidewalks along a section of Independence Street. Kelley was the low bidder.

Federal funding awarded by the Missouri Highways and Transportation Commission will pay 78 percent of the cost with the city footing the rest of the bill, officials said.

The project involves construction of sidewalks along Independence Street from Cape LaCroix Trail to Gordonville Road, with a connection to the existing sidewalk along East Rodney Drive.

mbliss@semissourian.com

(573) 388-3641