August 2, 2007
County Seeking To Level Playing Field With Use Tax Ballot Initiative
Scotland County voters will head to the polls on August 7 faced with just one single ballot issue. The county is seeking the implementation of a local use tax in an effort to join 30 other counties across the state that have implemented the special tax imposed on the purchase of items from out of state.
The ballot issue is seeking approval of a use tax of 1.25 percent, the same rate charged for local county sales tax.
In 1996 the Missouri General Assembly gave counties and cities the authority to impose local-option use taxes, subject to voter approval.
The term “use” tax means just that, a tax on out of state goods or materials that are shipped into Missouri and used by the purchaser.
Currently these types of materials are not subject to local sales tax. By law, a use tax is identical in value to the sales tax amount the seller avoids paying by not physically being located in the state.
For example, a local contractor is buying lumber from an outlet in Iowa. Currently they may be avoiding paying sales tax on these purchases. If approved, the use tax, would mean this purchase would be subject the Scotland County sales tax, just as if the materials were bought locally.
Proponents say the benefit is two fold, it generates needed sales tax lost on non-local sales and it also eliminates an unfair advantage non-local retailers have to lure business away from local merchants, with what in essence is a year-round tax holiday.
“Basically we looked at the use tax as a way to level the playing field for our local merchants,” stated presiding commissioner Mike Stephenson. “At the same time, the county needs the revenue, so the use tax is just as important an opportunity to generate revenue.”
If passed by voters, the county estimates the use tax will generate $30,000 to $40,000 annually.
Out-of-state vendors that maintain a facility in Missouri, are required to collect the local use tax and submit it to the Missouri Department of Revenue just as Missouri retailers are required to do with sales tax collections.
If the out-of-state vendor does not have a facility in Missouri, the customer is required to file a use tax return with the Missouri Department of Revenue, but only if more than $2,000 in purchases are made in a calendar year.
The election will be conducted in one polling place, at the Scotland County courthouse, with the polls being open from 6:00 a.m. until 7:00 p.m.