By Debby Woodin
dwoodin@joplinglobe.com
Joplin and other Missouri cities may see a resolution in the next session of the state Legislature to lawsuits they are facing over tax stacking.
The majority floor leaders of the state House and Senate say they will propose legislation aimed at clearing up the question over how many sales taxes towns may assess and how much in such taxes may be assessed.
A written statement issued by the majority leaders, Rep. Steve Tilley, R-Perryville, and Sen. Kevin Engler, R-Farmington, states that they “will propose a potential resolution that would resolve pending disputes about the levels at which Missouri cities may impose municipal sales taxes on taxpayers.”
What’s proposed
Their proposal would allow cities to keep their existing sales taxes in place, but prohibit future assessment of general sales taxes beyond 1 cent, the news release states.
Joplin is the target of one of several lawsuits filed by attorney Tom Burcham. He contends that the city violated state law by imposing, even with voter approval, a half-cent public safety tax as a general sales tax in addition to the city’s original 1-cent general sales tax.
State law does not specifically allow a public safety sales tax for cities, though it does for counties.
The law also allows a transportation sales tax of up to a half-cent, a parks and stormwater sales tax of a quarter-cent, a capital improvements sales tax of three-eighths of a cent, and a hotel/motel tax of up to 6 percent.
In Southwest Missouri, the cities of Mount Vernon, Granby and Purdy were subjects of similar lawsuits. Burcham also filed lawsuits against Branson West and Sikeston. He initially won a decision in the Purdy case, but Circuit Judge Robert Wiley recently set aside his decision in that case. The Granby lawsuit has been dismissed. Mount Vernon eliminated the offending tax and established another cited under state law, but the lawsuit is still pending.
Joplin suit
The Joplin lawsuit says that Gerald Friedrich, of Levasy, a visitor presumably sent to the city by Burcham, made a purchase Jan. 21 at Lowe’s Home Store of $5.86, paying 46 cents in sales taxes. Burcham is asking that either the city’s 1-cent general tax or half-cent public safety tax be declared invalid, contending that it was against state law for the city to assess both taxes on Friedrich’s purchase.
The city contends that it relied on an opinion issued by the Missouri Department of Revenue in proposing the additional half-cent public safety tax, which is a general sales tax. All of the sales taxes must be approved by voters. City Attorney Brian Head also said there was a 1991 decision in a circuit court in St. Charles allowing multiple general sales taxes that the city of Joplin used as guidance.
Burcham said Thursday by telephone from his Farmington law office that his intention is “to stand down” on the other lawsuits until he sees what happens with the legislative proposal.
“I’m going to dismiss the lawsuits without prejudice,” he said, “which means I am going to refile them if the legislation does not pass.”
He said the legislation that Tilley and Engler intend to file would be a compromise, allowing cities to keep existing sales taxes but setting limits that would prohibit tax stacking in the future.
He said his willingness to agree to a compromise is because the cities relied on the opinion from the state Department of Revenue.
“In the end, there is certainly some equity in the idea the cities relied on that DOR letter,” Burcham said.
Tilley earlier this year was criticized by Gary Markenson, executive director of the Missouri Municipal League. He contended that the league proposed legislation last session that would have capped general sales taxes at 2 cents, but that Tilley would not advance the bill for action.
Tilley could not be reached Thursday to discuss how his proposal is different. Burcham had said earlier that it is not acceptable to allow cities to increase their sales taxes or protect their actions retroactively. He said the state Senate did not act on the earlier proposed legislation for that reason.
Local reaction
Joplin’s mayor, Gary Shaw, said the development is welcome because city leaders did not believe they had violated the law by asking voters to enact more than one general sales tax.
Head, the city attorney, said that while he believes there are more details to be clarified in the wording of the legislation, “this is a good first step toward resolving this issue.”
Tax collections
Joplin’s 1-cent general sales tax was adopted in 1969. It has generated as much as $12.3 million a year to support the general fund. The half-cent public safety sales tax has brought in a total of more than $12 million since it started being assessed in 2007. It has funded the expansion of the police and fire departments, and crime deterrents.
