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The Lake News Online
  • City mulls another run at use tax

  • The City of Laurie is mulling another run at a use tax to replace sales tax on out-of-state and individual-to-individual sales of vehicles and boats and other large ticket items.
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  • The City of Laurie is mulling another run at a use tax to replace sales tax on out-of-state and individual-to-individual sales of vehicles and boats and other large ticket items.
    This type of sales tax - utilized by the state and local governments since the 1940s - was ruled unconstitutional by the Missouri Supreme Court in January 2012. Collections were ended in March 2012 as a result.
    The City of Laurie estimates that in the nine month period since this sales tax - which had a rate for this municipality of 2 percent - was halted, it has lost about $3,000 - about 20 percent of its vehicular sales tax revenue.
    Mayor Herb Keck says the ending of this sales tax also discourages people from buying these items at local businesses as they can pay less sales tax by going out of state.
    A ballot measure by the city in August 2012 to implement a 2 percent use tax on these items - which would be constitutional - to replace the lost revenue failed to pass.
    While the amount lost may not seem like that much, the city has been in an ongoing budget pinch seeing revenues decline over the last several years while expenses have simultaneously gone up. The municipality does not collect any property tax and relies on sales tax as its funding base.
    At its Dec. 12 meeting, the board of aldermen discussed placing the use tax question on the ballot again in hopes of better educating the public that it is a replacement, not an increase in taxes.
    Keck says he believes that people voted against it because they did not realize it was a replacement and not an increase.
    A bill that would have allowed cities and counties to collect use tax on these items at the rate they had before collected sales tax was passed by the state legislature but was ultimately vetoed by the governor.
    With this development, Keck says he would like to try to work with Morgan and Camden counties - who also lost this revenue - to all go to the people in the same election to ask for the use tax in order to jointly educate the public on the issue.
    The board tabled the discussion on the use tax but is having an ordinance to place the issue on the ballot prepared for its Jan. 9 meeting.

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