COLUMBIA - Columbia City Council members will have to consider whether to raise the sales tax on shoppers at a Columbia shopping district between now and the end of the year.
Attorney Robert Hollis represents the Shoppes at Stadium Transportation Development District (TDD) and drafted a letter to city officials on July 26, asking the city council to approve a tax increase on shoppers at the district. The proposed increase would raise the sales tax that funds transportation and infrastructure improvements in the area from 0.625 percent to one percent, the maximum rate a TDD can charge shoppers under state law.
"Based on a review of the district's revenues and financial obligations, the board of directors has concluded that it is necessary to increase the sales tax rate charged on eligible retail sales within the district from five-eights of a cent to one cent," Hollis wrote.
The Shoppes at Stadium TDD is the one of few TDD's in Columbia that require approval from the city council to increase the tax rate. Others can raise the rate as they see fit. The Conley Road TDD raised its rate to one percent, a change set to begin on Oct. 1.
The TDD sought and won approval to increase the rate from half a percent to its current rate in June 2012. Columbia second ward city councilman Michael Trapp said the district will have to provide documentation showing exactly how it will spend the money if he is to vote for any increase.
"They don't have to provide that information, but they have to provide it if they want me to vote for the proposal to increase the tax rate," Trapp said. "If they don't then I'll just vote No."
Trapp said many Columbians are already taxed "at capacity," meaning they are already paying significant portions of their income towards sales taxes. Trapp said the city will have to perform careful due diligence in evaluating any new sales tax increases.
If the TDD gets approval from the city council to raise the tax rate, the change would go into effect on Jan. 1, 2014.