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Use Tax on April 8 Election Ballot

To the members of the Cape Girardeau and Jackson Chambers of Commerce,

On behalf of the Board of Directors of both the Cape Girardeau Area Chamber of Commerce and the Jackson Area Chamber of Commerce, we respectfully request your vote in support of a local use tax on April 8, 2014.  Both Chamber Boards believe it is the responsible thing to do to put our local businesses on the same competitive footing as out-of-state businesses.

 

Use tax cannot be charged in addition to sales tax. The state of Missouri already imposes a use tax and we believe it is time we act on behalf of our local businesses and ask for the companion local use tax. Not doing so provides an incentive to make purchases from out-of-state vendors to save sales tax.

By definition a use tax is imposed on the storage, use or consumption of tangible personal property in this state. The state use tax rate is 4.225%. Cities and counties may impose an additional local use tax. The amount of use tax due on a transaction depends on the combined (local and state) use tax rate in effect at the Missouri location where the tangible personal property is stored, used or consumed. Local use taxes are distributed in the same manner as sales taxes.

Unlike sales tax, which requires a sale at retail in Missouri, use tax is imposed directly upon the person that stores, uses, or consumes tangible personal property in Missouri. Use tax does not apply if the purchase is from a Missouri retailer and subject to Missouri sales tax.  A purchaser is required to file a use tax return if the cumulative purchases subject to use tax exceed two thousand dollars in a calendar year. (Taken from Missouri statues)

On April 8th, you will be asked to consider a local use tax. Cape Girardeau, Jackson, and Cape Girardeau County are seeking this companion use tax. If you live in the city of Cape Girardeau, you will be voting on both the Cape city and the county use tax. Likewise, Jackson residents will be voting on Jackson and the county use tax. County residents will only be voting on the county issue.

Remember the investment in our area made by our local businesses. Please help protect their interests by voting YES on April 8th. We have included a Frequently Asked Questions document. Scroll down to review.  If you have additional questions, please do not hesitate to call us.

Please feel free to pass this information along to friends, co-workers, family, etc. who reside in Cape Girardeau County. 

Respectfully Submitted,

John Mehner                                                                 Brian Gerau

President & CEO                                                            Executive Director

Cape Girardeau Area Chamber of Commerce                       Jackson Area Chamber of Commerce

   

Frequently Asked Questions

1. What is the use tax?

The use tax is a tax that applies to purchases of tangible personal property from out-of-state retailers for use, storage or consumption in Missouri. You are required to file a Use Tax return only if you have more than $2,000 in untaxed purchases from out of state vendors in a calendar year.

2. Is use tax something new?

No. Although taxpayers are often less familiar with use tax than with sales tax, the State of Missouri has imposed a use tax at the state sales tax rate of 4.225% since 1959. All states which impose a sales tax also impose a companion use tax.

3. What is a local use tax?

The state imposes a use tax and gives local cities and counties the option of doing the same at the local sales tax rate. This requires a vote of the citizens.

4. Why is use tax important?

Use tax is important because it protects our local businesses from a competitive disadvantage with out-of-state vendors. When a local use tax provision does not exist, our businesses can automatically be undercut by the out-of-state vendor. Use tax puts in-state and out-of-state businesses on the same competitive footing. In addition, the operation of cities and counties comes primarily from the revenue of sales and use taxes.

5. What is the rate for the use tax?

The tax rate for the use tax is the same as the sales tax. This rate is determined by where the tangible personal property will be used, stored or consumed, regardless of where the sale actually takes place. Therefore, the tax rate for the local use tax will be the same as the sales tax rates in Cape Girardeau (2.75%), or Jackson (2.0%), and Cape Girardeau County (1.0%). These rates would be in addition to the state rate of 4.225%, to equal the total current sales tax rates.

6. How would the revenue received from a use tax be used?

The revenue received from a use tax would be used just like sales tax revenue for the local city/county. It will be considered general revenue and be used for essential services.

7. What is the difference between the sales tax and the use tax?

The sales tax is imposed on all retailers within Missouri and applies to all retail sales of tangible personal property within the state.  The use tax is imposed upon the consumer of tangible personal property and applies to untaxed purchases from out-of-state retailers.

It is important to note that either the sales tax or the use tax applies to a single transaction, BUT NOT BOTH. A use tax does not change the local sales tax rate and is not charged on purchases made from local businesses.

8.  If a sale by a Missouri retailer is exempt from the Missouri sales tax, is the purchase of the same product from an out-of-state retailer exempt from the Missouri use tax?

Yes. 

 

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