The Joplin Globe, Joplin, MO

June 21, 2013

Joplin looks at posing use tax; estimated loss could be $430,000 this year

By Debby Woodin

— Joplin city officials will consider placing a use-tax question on the Nov. 5 ballot.

A Missouri Supreme Court ruling early last year overturned the practice of collecting local sales taxes on motor vehicles that were purchased out-of-state or from individuals. That means that area residents are not paying city or county sales taxes when they register a car, truck, boat or trailer or other property that requires a title when it was bought in another state.

“Local businesses can lose business by people going out-of-state to buy vehicles, and it can impact local sales tax collections,” Leslie Haase, the city’s finance director, told the council at its informal meeting last Monday.

She estimated that it cost Joplin about $188,000 in sales tax proceeds so far this year. She said the state has projected that it will cost local governments 21 percent of what would have been their sales tax totals. “We project it could be higher,” costing Joplin about $430,000 for the year, Haase said.

The Joplin area is one that could lose more than some other regions of the state because of its proximity to Kansas, Oklahoma and Arkansas. Missouri has a use tax of 4.22 percent, so those who register a vehicle or trailer are paying that tax but not a Joplin or Jasper County tax. Haase said about half of Missouri cities with more than 2,000 population — 105 — and 56 counties have a use tax.

The state Legislature has passed a few bills attempting to impose the tax. Gov. Jay Nixon vetoed one measure and two others are pending in his office, though they may also be vetoed.

The council authorized the finance director to proceed with putting together a formal proposal.

Jasper County’s losses are more than Joplin’s, and the Jasper County Commission will hold discussions on its options, said Darieus Adams, the Western District commissioner.

“I think it’s safe to say that because of the void we experienced when we lost that we would be willing to explore options,” Adams said. “The county’s loss last year was approximately $358,000, and for the six months this year it’s got to be well over $400,000. It’s a pretty big void.”

Voters in the city of Carl Junction have previously turned down imposition of a use tax, but the council there was to discuss the possibility of posing it again at a meeting Tuesday night.

City Administrator Steve Lawver said the city did not discuss it enough with voters last time.

“We put this on the ballot at the same time we did our parks and stormwater tax, and they voted in the parks and stormwater tax because it is pretty straight forward,” he said. “This one we kind of stuck on there also, and we didn’t do anything to educate people other than put out a little information in the newspaper.

“It’s really a hard tax to try to describe to people. Leslie (Haase) has done a really good job of putting together information on it. We’ll be using the exact same information except it will have Carl Junction numbers on it.”

Lawver estimates the city has lost about $47,000 in tax revenue since the court ruling.

Haase told the Joplin council that a regional approach involving area cities and counties placing the question on the ballot may help its chances of passage. She said election costs could be shared by those entities.

Missouri residents are supposed to pay use taxes on their annual state income tax returns for purchases over $2,000, Haase said.

The Jasper County Commission has not yet held any public discussion about the proposal.

Projected impact of vehicle and marine sales tax losses to other cities:

Carthage, $62,945.

Neosho, $69,507.

Webb City, $74,535.

Source: Joplin Finance Department