County to ask voters for use tax on Nov. 6

By Ralph Pokorny

Nevada Daily Mail

"This is not a new tax, and it is not a tax increase," Vernon County Presiding Commissioner Bonnie McCord said of the out-of-state use tax question that will be on the Nov. 6 ballot. The tax, which would equal Vernon County's 1 percent sales tax, would be collected on items purchased out-of-state for use in Missouri.

"It's designed to level the playing field for local merchants and not give an unfair advantage to out-of-state merchants selling to Missouri residents," McCord said.

She said that Vernon County Treasurer Phil Couch has estimated it will bring about $57,000 more in sales related taxes to the Vernon County government, she said.

"That's money taken out of our community and that's a big deal," Gina Ensor, Nevada-Vernon County Chamber Commerce director said.

"Sixty thousand dollars is two people's jobs," she said. The use tax is a means to keep dollars here, she added.

The concern that McCord and Ensor have is that voters will just vote against the use tax, thinking it is a new tax.

Southern Commissioner Kennon Shaw agreed, saying that if he did not know what the use tax is, he would vote against it.

This all became an issue when the Missouri Supreme Court ruled in January 2012 that the Missouri Department of Revenue did not have the authority to collect the county's portion of sales taxes on cars purchased out-of-state and the only way this could be collected is if a county's voters approved a county use tax on out-of-state purchases. This ruling was followed by Gov. Nixon's vetoing a measure passed by the state legislature imposing a use tax, saying that it would require about 122,000 Missouri residents to pay the use tax retroactively on cars they purchased out-of-state since the court ruling.

Missouri already collects an out-of-state use tax of 4.225 percent, an amount which is equal to the state sales tax.

According to state statute the county's proposed out-of-state use tax must be equal to the current 1 percent Vernon County sales tax, she said.

"We must have a vote of the people to put this tax on out-of-state vendors," Neal Gerster said.

"This is just an extension of a tax that has been collected for years," Dan Hope, Nevada Auto Mall said.

If the out-of-state use tax does not pass it will hurt businesses in Vernon County and Nevada, he said.

Hope said that this has had a large impact on car dealers in St. Louis, where Illinois dealers have promoted the issue.

McCord said that if Vernon County voters approve the use tax, it will have no effect on the one-half percent sales tax for the new jail, which will still drop to one-quarter percent to fund the sheriff's office when the jail is paid for in 16 years, she said.

McCord said the use tax will apply to purchases across state lines and catalogue sales for products for use in Missouri.

"There is no provision to collect taxes on Internet purchases," she said.

"Currently if you buy a car in Kansas the state already gets their 4.225 percent. If voters pass the use tax, the state will collect our tax, too," she said.

The tax would only apply to people with out-of-state purchases exceeding $2,000 per year.

According to a brochure that was paid for by Neal Gerster, Bonnie McCord and Kennon Shaw, 40 counties in Missouri have an out-of-state use tax including Bates, Cass, Dade and Henry counties in this area.

This tax would also give Vernon County an opportunity to collect use tax when heavy construction projects, like pipelines or power lines, are constructed in the county.

The tax would not apply to raw materials businesses and industries use to manufacture products for resale.