Franklin County plans to put a countywide use tax before voters in the election next April, Presiding Commissioner John Griesheimer said Thursday.
“It (use tax) really doesn’t affect 99 percent of the general population of Franklin County,” Griesheimer said, adding, “This is something most citizens will never see.”
The tax would apply when products were bought in another state and then brought back to Missouri. However, he said the use tax would only apply when sales tax was not charged in the state where the products were purchased.
“You are not double taxed,” he said. “If somebody pays a sales tax somewhere, they’re not subject to it (use tax).”
Examples of products the use tax could apply to include computers, office supplies and medical equipment, he said.
The county commission may vote in January to put the use tax on the ballot.
First District Commissioner Tim Brinker said he also supports putting the use tax on the ballot. Second District Commissioner Mike Schatz could not be reached for comment Friday.
If the tax did go to the voters, it would only require a simple majority approval to pass, County Clerk Debbie Door said.
The tax would be equal to the percentage of the county’s sales tax, which is 1 1/2 percent, Griesheimer said. The use tax would be split equally between the three sales tax funds — law enforcement, general fund and road and bridge, he said.
He added that a use tax “will help raise some much needed funding for Franklin County.”
He said, “We’re required by law to provide a certain level of services, and as the county grows so do the level of services.”
Everyone needs to understand that the county’s expenses keep rising, he said. In order to continue quality services and give employee raises, an additional source of revenue is needed, Griesheimer said.
Other counties have approved a use tax, including the surrounding counties of Warren, Washington and St. Charles, he said.
“It’s really been a lot of help financially to them,” he said, noting that the Missouri Association of Counties recommends the use tax.
He said purchases that are currently tax exempt in Missouri, such as agricultural products, also would not be subject to a use tax.
He mainly sees the use tax affecting businesses and industries who buy items out of state without paying a sales tax and bringing those products back to Missouri.
He had no revenue estimate on what the tax would generate.
The use tax would not affect most Franklin County residents because most people buy local anyway, he said.
Local businesses and Chambers of Commerce support the use tax because it “levels the playing field” by taking away the incentive for people to buy products in another state, Griesheimer said.
“This is not an anti-business thing,” he said.
He noted that there is already a state use tax in place.
The city of Washington is the only entity in Franklin County that currently has a use tax.
At least $2,000 worth of goods must be purchased before the use tax kicks in, Griesheimer said.
The county also needs to enact a use tax because the sales tax on out-of-state vehicles that was recently approved by the Legislature may be challenged in court, he said.
If that sales tax on out-of-state vehicle purchases goes away, the county needs to be ready with a use tax so it can collect needed revenue, Griesheimer said.
The Legislature this year approved reinstating the sales tax on out-of-state vehicle sales after the Supreme Court said the tax was unconstitutional.
The difference with the new sales tax is that voters must be given a chance to repeal it no later than November 2016 or the tax is taken off the books.
According to The Associated Press, the January 2012 state Supreme Court ruling said Greene County could not charge a local sales tax on a man who bought a boat from a dealer in Maryland. The ruling drew a distinction between sales taxes, which are collected from in-state retailers, and use taxes, which are levied on products used in Missouri but bought either from an out-of-state retailer or from someone who does not run a business, the AP reported.
The Supreme Court said Greene County could not tax the boat because it wasn’t covered by the local sales tax and county voters had not approved a local use tax, the AP reported.