Local Use Tax On Tuesday’s Ballot

If Grundy County voters had voted “yes” on a local use tax last April, the county coffers would be almost $70,000 richer this year.
Instead, the tax fell by a margin of 522 in favor and 694 opposed. Now Grundy County commissioners have placed the issue back on the April 8 ballot, hoping that voters will see the benefit in a tax that affects very few people and benefits the entire county.
A use tax is designed to eliminate the economic advantage that interstate sellers (those who sell across state lines) have over hometown merchants. It also helps replace the local sales tax that is lost on goods or materials that are purchased out of state.
“One of the main reasons we need this is that it levels the playing field for local vendors versus out of state vendors. They don’t have the advantage of selling tax-free,” said Second District Commissioner Joe Brinser.
The tax, which does not affect out of state businesses that have a physical presence in Missouri, is paid by a purchaser (most likely a large business or industry) that is making purchases of more than $2,000 in a calendar year from out-of-state vendors. Those who currently pay a state use tax will pay a county use tax as well. This would not apply to the average person who, for instance, orders books on-line. The purchases must total $2,000 or more and for an individual, they are on the honor system to report it. Corporations and large businesses often have internal auditing and accounting procedures that tell them when they are to pay the tax. The bottom line is, the average citizen will see no difference in the amount of tax they pay, but the local businessman will be more able to compete with out-of-state vendors and the entire county will have more money to spend on needed services.
“If this passes, we would be using the funds for 911 and for the townships for road and bridge projects” explained Presiding Commissioner Rick Hull.
Currently, every county surrounding Grundy has passed a use tax and is collecting money. While Grundy County is asking for a 1.5 percent tax, the amount in surrounding counties varies from 0.75 percent in Livingston County to 2.75 percent in Sullivan County. (See table in Friday’s Republican-Times). Statewide, 56 of Missouri’s 114 counties have implemented a use tax.
Missouri counties have been fortunate that out of state vehicle purchases have still resulted in the purchaser paying a 1.5 percent tax to local entities. Those funds are distributed with sales tax monies. However, First District Commissioner Gene Wyant warns that might not always be the case, indicating that if we have not implemented a use tax by 2016, the state will collect its 4.225 percent, but the 1.5 percent paid to the county will cease. That means sales tax revenues will decrease. The only way to make that up is if the county has a use tax in place to offset the amount lost in sales tax.
All Grundy County voters will have the opportunity to vote on the tax, with polls open from 6 a.m. until 7 p.m. on Tuesday. Absentee balloting is taking place until 5 p.m. Monday, with the county clerk’s office open Saturday morning from 8 a.m. until noon.