By Steve Taylor
For the Leader
Voters all over Jefferson County will likely get an opportunity in the Aug. 7 primary election to decide whether they will pay sales taxes on purchases made over the internet.
The Jefferson County Council voted 6-0 May 14 to give preliminary approval to placing the measure, called Proposition F, on the ballot.
The council is expected to give final approval at a special meeting, to be held at 6:30 p.m. tonight (May 24).
Proposition F also will appear on the ballot in Arnold, Festus, Crystal City, Herculaneum, Byrnes Mill, Hillsboro, Pevely and De Soto after each town’s City Council or Board of Aldermen voted to place the issue before voters.
In each of those cities, residents will vote on both a local proposition and the countywide one. The language in each will be identical except for the tax rate, which will vary depending on the location.
Voters in unincorporated parts of the county will vote only on the countywide proposition.
A simple majority will be required for passage in each case.
The Kimmswick Board of Aldermen has not voted on the issue.
The deadline to place ballot issues on the Aug. 7 election is 5 p.m. May 28.
The ballot issues will direct internet sellers, like Amazon, to collect local sales taxes in addition to the state sales tax, which they already collect.
Crystal City Councilman Tony Becker, chairman of the campaign committee to promote the issue, Yes for Fair Business, said his group’s title sums up the message it wants to put out.
“The way that the tax is set up is that if you go to a local business and buy something, you’re going to pay 7 percent to 10 percent sales tax, depending on where you shop. Of that amount, 4.2 percent goes to the state, 1.625 percent goes to the county and most of the rest to the city, if the store is in a municipality. We’re all used to paying those taxes.
“But if you buy off the internet and have something shipped right to your door, you’re still paying the 4.2 percent to the state, but the county gets nothing and the city gets nothing, because of the way the law is written.
“That leaves local retailers at a disadvantage. This sets up an unintentional disincentive to buy from local retailers. The current setup doesn’t do our local retailers any favors, and it doesn’t do any favors to local governments, who rely on sales taxes to build and fix streets, provide police and fire protection and all the other things that governments do.
“This is something that we see is inherently unfair,” he said.
Becker said his group doesn’t have any estimates on how much revenue could be generated if Proposition F passes, how much sales tax is being lost with internet sales on the rise or the extent to which shoppers choose the internet to avoid paying local sales taxes.
“We do believe that it plays a factor, though,” Becker said.
In addition to online purchases, Becker said, passage of Proposition F will fix another inequity.
“This also will affect anyone who is buying goods or services out of state and don’t pay sales taxes on those,” Becker said. “For instance, we have a local party supply business that, because it’s a Missouri-based business, must charge sales tax on its rental contracts. If you’ve got a $20,000 contract, that’s a lot of money, and some people instead are now contracting with businesses in Illinois, which doesn’t require sales tax. I don’t know that anyone could call that a level playing field.”
Becker said he understands that some people might be opposed to Proposition F.
“Many people are opposed to taxes in general, and I understand that. I certainly don’t get excited by new taxes,” he said. “But this is not a new tax – we all voted at one time or the other to accept sales taxes. The system as it’s set up (because internet sales weren’t anticipated years ago) is not working and just needs a tweak. If you don’t buy on the internet, it won’t affect you at all.
“The other thing to consider is that the federal and state governments are cutting taxes, and when that happens, the funding mechanisms in place to help local governments get cut. We all want services like good streets, good police and fire protection and other things that local governments provide. We’re facing challenges paying for them.”
Becker said many people, once they learn the facts, change their minds about opposing the idea, however reluctantly.
“Once people find out what it is and what’s been going on,” Becker said, “they still say that they’re not necessarily crazy about it, but understand that it’s important to level the playing field for all buyers and sellers.”
Becker said it was important that the county and the cities join together to place the issue on one ballot, rather than spread it over several elections.
“We’re very encouraged by the reception at both the County Council and city levels,” he said. “We look forward to being able to run a truly countywide campaign with all municipalities participating.”
Arnold City Administrator Bryan Richison said the city will work with the county and other cities on a joint campaign.
If the issues pass, Richison said he doesn’t think the city will see a big increase in revenue right away, but that the cities and county “need to be prepared for when local retail is greatly diminished” because of online sales.
That’s a point that County Executive Ken Waller also emphasized.
“While we don’t want to see flat sales taxes or even the possibility of declines in the future, if we don’t get this passed, down the line I think we’ll see some stores in the county close up,” he said. “No, those may not be Walmart, Kmart or Target, but our smaller businesses won’t be able to compete, and that hurts everyone. We like to think that Jefferson County is a good place to live and a good place to shop, and if a lot of stores are forced to close, it won’t be as good of a place to shop.
“The county is not a better place seeing vacant storefronts instead of businesses.”
County Council wants money for buildings
The measure the Jefferson County Council will vote on will direct any internet sales taxes generated by the countywide 1/2 cent sales tax for road and bridge improvements to the county building fund.
The amendment was introduced by Councilman Don Bickowski (District 1, Eureka).
“We understand that sometime down the line, we will have to build a new courthouse and a new jail,” he said. “Although the county has been trying to build its reserves, there is no specific allocation of money toward this. We have the opportunity to start building a fund for these large expenses, and it makes perfect sense,”
Waller said he didn’t agree with the amendment, but would sign the measure into law anyway.
“We do need to look long-term toward a new courthouse and jail, but I don’t believe doing it on the back of our Public Works Department, especially when they’re looking to assume the maintenance of private subdivision streets, is the way to go. While we need to look toward financing of a new jail and courthouse, I don’t believe this is the proper mechanism. But if this is the only way to get it passed, that’s the way it has to be.”
The council voted 6-0 for the amendment.