Voters in Jefferson County may have a lot to consider when they head to the polls next year.
County Executive Dennis Gannon told the County Council on Oct. 18 he’d like to revive a previous initiative to allow the county to collect sales taxes on internet sales, as well as on out-of-state sales on items like vehicles and place it on the April 2022 ballot.
Gannon also said he wants to place two initiatives – a bond issue and a sales tax – on the August ballot to build a new courthouse and jail.
The Jefferson County Council already had decided to place a 3/8-cent sales tax on the April 2022 ballot for those who live in unincorporated parts of the county, and the revenue from the tax will be used to fund improvements to county parks.
Use tax
The county had asked voters in August 2018, as did nine cities around the county, to allow the county to collect taxes on internet and out-of-state sales. All failed, except in Kimmswick.
Missouri residents already are obligated to pay state use taxes on internet sales, but not all vendors collect it. Missouri residents who buy more than $2,000 in untaxed goods and services are supposed to report that on their state income tax return.
A new state law that goes into effect in January 2023 further requires businesses based outside the state to pay Missouri’s sales taxes if they did more than $100,000 in business in the previous calendar year.
The new law is commonly called “Wayfair” and comes from a 2018 U.S. Supreme Court case, South Dakota vs. Wayfair Inc., that overturned a rule that prevented states from taxing the sales of vendors who don’t have a physical presence in that state.
However, the new law applies only to the state sales tax. Counties, cities and other entities that collect sales taxes must ask their voters to approve what is called a “use tax” on internet purchases and out-of-state sales that is equal to their sales tax rates.
“I think every municipality will have a use tax on the ballot next April,” Gannon said, “but it does not appear there will be a concerted effort to work together.”
Missouri collects 4.225 cents of sales tax on every dollar spent. Jefferson County adds 1.625 cents to that rate. Cities add more.
Gannon said the resounding failure of the 2018 attempt (countywide, 68.6 percent of voters turned thumbs-down on the proposal compared with 31.4 percent in favor) is a clear indication that more work needs to be done.
“We have to inform and educate the public on what this is,” he said. “This isn’t a new tax. We have to let them know there is value to what they’re voting for.”
David Courtway, director of administration, agreed.
“What has changed? We’ve heard many stories of businesses in this county and around the state telling us it’s unfair that they have to place up to 10 percent in sales taxes while online retailers don’t.”
Courthouse, jail initiatives
Councilwoman Renee Reuter (District 2, Imperial) asked why Gannon is planning to place the use tax on the April ballot, rather than in August, when primary elections for countywide offices are already on the ballot.
Gannon said he wants to place the bond issue and sales taxes to build a new courthouse and jail on the August ballot and didn’t want those on the same ballot with the use tax.
“People who work in those facilities have expressed dire circumstances on their working conditions,” Gannon said. “We’ve put money into both of these buildings every year and some people have referred to that as a Band-Aid solution, but I think it’s more like duct taping.”
Gannon said revenue from the bond issue would be used to finance the construction of both facilities, and a 1/2-cent countywide sales tax with a sunset provision of 20 to 25 years should be enough to pay off the bond debt.
He said he didn’t yet know how large a bond issue the county would need.
A bond issue would require a 4/7 (57.14 percent) majority vote for passage, while a sales tax would need a simple majority for passage.
The county recently purchased a 15.24-acre lot at Business 21 and Goldfinch Lane south of Hwy. A in Hillsboro as the possible site for a new jail.
The current jail, 510 First St., in
Hillsboro opened in 1991 to house 116 prisoners, but since then has been expanded to accommodate 334, although Sheriff Dave Marshak has said the number of prisoners housed there often exceeds that number.
Gannon has said a new courthouse could be built on the parking lots south of the current one at 300 Main St. in Hillsboro.
That building opened in 1863 and has had several updates and additions since then. For most of its life, it housed most county government departments and offices, but now, it primarily provides space for the 23rd Circuit Court operations, including courtrooms, the Prosecuting Attorney’s Office and the Circuit Clerk’s Office.
Both facilities have been deemed inadequate for their current uses, with major renovations considered too costly.
“I’ve been told that day by day, inmates are trying to figure out how to undermine the jail,” Gannon said.
He and County Counselor Wes Yates recommended that action to replace both facilities should start as soon as possible.
“My big worry is if a federal judge takes over the jail (as a result of a potential lawsuit). That judge will tell us what to do and how to do it and will not be concerned with how much we’ll have to spend to comply,” Yates said.
Gannon conceded that, like the use tax, county officials will need to educate voters about the need for the sales tax and bond issue.
“We will have to develop a plan to pass this,” he said. “We will have to all work at it if we really want it.”
Courtway said current estimates indicated it would cost $130 million to $140 million to build both facilities.
“If we wait, over time the building cost may go up extensively,” he said.
Reuter suggested that placing all four issues before voters in two consecutive elections “is probably too aggressive of a timeline.”
“I don’t know how we can wait,” Gannon said. “It won’t get any cheaper to build.”
“We’re still at the best, low interest rates,” Courtway said. “But how long is that going to last?”
“It’s time to stop duct taping these buildings together,” Gannon said. “If we don’t do it, who’s going to do it?”
He did not say when he planned to submit ordinances to the County Council to place the issues on the ballots.
The deadline to place an issue on the April 2022 ballot is Jan. 25, 2022; for the August 2022 ballot, the deadline is May 24, 2022.