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The Carthage Press
  • City might put use tax on ballot

  • A decision to put a use tax on the ballot in in the near future is still at least a month away for Carthage City Council members, but members of the Council's Budget Ways and Means Committee began looking at the idea in earnest at Monday's regular committee meeting.
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  • A decision to put a use tax on the ballot in in the near future is still at least a month away for Carthage City Council members, but members of the Council's Budget Ways and Means Committee began looking at the idea in earnest at Monday's regular committee meeting.
    City Administrator Tom Short presented the committee members with his reasons why they should consider asking Carthage voters to place a tax, equal to the city's sales tax rate, on vehicles, boats and other big ticket items purchased out of state but used in Carthage.
    Short said the use tax would replace revenue once collected when someone went to license a car or other item and paid sales tax in Missouri even if they bought the item out of the state.
    The use tax rate would be the same as the city's portion of the sales tax paid on purchases locally, about 2.4375 cents on every dollar. It would only be charged on purchases over $2,000 on items bought out of state and in cases where sales tax was not already collected.
    The Missouri Supreme Court declared last year that the state and cities didn't have the authority to collect taxes on out of state purchases unless they had use taxes in place.
    Short said the Missouri Department of Revenue has estimated the decision will cost and has cost Carthage just under $63,000 per year.
    “Because we're in more of a proximity to other areas, we have a greater chance of losing more money than that,” Short told the committee. “The decision created another loophole for people to not support local businesses, to do their business out of state and reduce our revenue to the general fund.”
    Short said the loss of $63,000 to the general fund is significant, especially in light of expected increases in personnel costs, such as health insurance and other costs.
    “It's $63,000 that could have been used for a number of purposes this year,” Short said. “We didn't do anything salary-wise for the employees because we're waiting on the health and life premium discussion with our carrier, because we're hearing things a lot higher than what we've budgeted. We just know we're limited in so many things. We have some employees who are red-lined now, they've hit the top of the scale and the only thing they're eligible for is a COLA. If we don't do a COLA, they just stay at that one point and they're salary is frozen.”
    Mayor Mike Harris told the committee he's skeptical of the plan and thinks it would be a tough sell to voters.
    “I have a lot of concerns with this, one of them is the state's involvement,” Harris said. “We already don't know why we have the ebb and flow in sales tax receipts. We base it on whatever the state says. I don't like projections, I don't like estimates. I'm not convinced we're losing the amount of dollars they project that we're losing.
    Page 2 of 2 - “If I'm going to tax citizens I want to know we're going to tax you this much, this is what we're going to get, this is what we're going to do with it. Then I think you can sell it. We don't have any of that here and it's just so vague.”
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