Scott City administrator Mike Dudek said Thursday if city residents approve by simple majority vote a 1.75% tax on online purchases next month, the money will likely go initially toward retention of municipal employees and to street repair.

Mayor Norman Brant, a strong proponent of the Nov. 2 referendum, said following the Scott City Area Chamber of Commerce meeting the plebiscite is the first time Scott City has ever asked its citizens to approve such a levy on internet sales.

The cities of Cape Girardeau and Jackson, which are also asking for voter OK of a use tax, each has seen multiple attempts to win approval fail in the past.

"This is definitely not a double tax," said Dudek, noting if the ballot issue prevails a customer will either pay sales tax on an item bought in a "bricks-and-mortar store" or will pay a use tax if purchased online -- not both.

"Approximately 160 municipalities in Missouri already collect use tax," said Dudek, who added Scott City officials estimate the levy will generate $200,000 annually for the city's general revenue fund.

Voters in Sikeston approved a use tax on out-of-state purchases in November 2019.

Dudek said when sales taxes were first imposed by local governments, no one had ever contemplated an internet nor the possibility of buying online.

"What's clear is internet sales will continue to increase and locally generated revenue will continue to decrease," he said, adding city officials have been speaking with groups and individuals about the referendum.

Information about the tax's potential benefits for Scott City have been included on the back side of municipal utility bills, Dudek added.

Chamber input

Blake Lingle, president of the Scott City chamber, told the gathering the results of a membership survey show 91% support a use tax.

Twenty-two businesspeople answered the survey.

Half of the respondents, Lingle said, wanted to see use tax revenue used for stormwater and street repair plus employee retention.