City Starting to Experience Dip in Sales Taxes - The Missourian: News

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City Starting to Experience Dip in Sales Taxes

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Posted: Saturday, September 22, 2012 8:00 am | Updated: 6:58 pm, Sat Jun 22, 2013.

St. Clair is experiencing a decline in sales tax revenue coming into city coffers.

Information shared during a recent board of aldermen meeting showed sales tax revenue was down almost $13,000 in June compared to a year ago and another $17,000 in July, also compared to the same month in 2011.

Overall through the first seven months of the year, after the local revenue had shown an increase through the spring, collected sales tax money to the city is down more than $15,000.

Before the summer months, the sales tax funding had been ahead of schedule.

“We cannot confirm with certainty that the decline is a direct result of the Missouri Supreme Court decision in April removing local sales tax on out-of-state and personal vehicle purchases,” City Administrator Rick Childers said. “But as we discussed (earlier this year), we knew it could be a possibility.”

Childers told the board of aldermen on Sept. 5 that it was anticipated that as much as $70,000 of local sales tax revenue could be lost because of the ruling.

“That would be for a community our size,” he said. “We are now starting to see that decline.”

Exact figures showed a $12,893 decline from June 2011 to June 2012 and another $16,929.91 dip from July 2011 to July 2012.

Through this July, overall sales tax revenue for the city stands at $273,982.07, or $15,141.92 less than a year ago.

Childers said if the decline continues, an alternative form of revenue may need to be discussed.

“An option the board needs to be aware of is placing a local use tax to replace some of these revenues,” he said. “I don’t think this is something we want to take action on immediately, but we’ll see if the trend continues.

“I just wanted to make you aware of it.”

Childers did say, however, that even though the sales tax revenues are falling below the projections, the numbers still are above the budgeted amount.

Mayor Ron Blum also addressed the issue.

“We track sales tax numbers monthly,” he said. “They fluctuate. We’ve seen a good increase of sales tax revenues the last couple of years, so we’ll have to keep watching it this year.”

Legislation

In July, Missouri Gov. Jay Nixon vetoed legislation that would have allowed communities to resume levying local taxes on vehicle purchases.

The Associated Press reported that in nixing the proposal, the governor said the legislation amounted to a new tax without a public vote, and in his veto message to lawmakers called the bill “an affront to every Missourian who has not yet had the opportunity to vote on whether to impose” the tax.

Missourians long have paid state and local taxes for vehicle purchases when they register their cars, trucks and other vehicles. But the state Supreme Court ruled earlier this year that local sales taxes cannot be levied when the purchase was made in another state. The ruling also applied when an individual sells a vehicle to another Missouri resident.

The high court’s decision still allows a local “use tax,” which applies to items used locally but bought without paying a home-state sales tax.

However, most Missouri cities and counties have not enacted a use tax.

Payment

In other business, Childers said that the first payment on the loan for the city’s portion of the Interstate 44 North Service Road improvements is due on Oct. 1.

The payment will be $192,900. Annual payments are scheduled through October 2021.

“I just wanted to make the board aware of this,” Childers said. “It’s just a reminder to you. It is a budgeted item.”

Also, the aldermen approved Joe Peterson as a member of the city’s board of adjustments.

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