Boone County seeks new tax to stem losses from online sales
COLUMBIA - Boone County is feeling the pinch in revenue lost to online sales and how to deal with that was on the agenda Thursday as officials met with city leaders from Ashland, Harrisburg and Columbia.
Sales tax growth may not meet the required numbers for the 2018 budget, and commission member Fred Parry said Boone County is currently in a tough spot.
"It presents a lot of challenges because, as our community continues to grow, but our sales tax continues to shrink, it kind of presents a tough challenge for us in the areas of law enforcement, street maintenance, being able to keep providing the basic services that our citizens expect."
Parry said the Boone County budget isn't as big as the City of Columbia's, which means it tends to rely on particular sources of revenue.
"We are unfortunately very reliant on sales tax revenues to help county government function," Parry said. "The share of our property taxes in this community go to our school district and so we don't have access to property taxes like counties and other communities do."
Parry said online shopping is cutting into local sales tax revenue.
He also says the commission monitors sales tax growth throughout the year and typically uses reserve funds to cover any shortfalls. The commission hopes to add some cushion for the budget by proposing a possible use tax, which collects sales tax from out-of-state retailers.
Parry said, while some consumers may not be happy with the use tax, it will help compensate for losses to online stores.
"It's only fair that they should be able to level the playing field against online retailers who don't really have the same burden to pay taxes as our local brick-and-mortar retailers do."
According to Parry, Amazon is responsible for about 43 percent of online sales in Missouri. If Boone County residents vote to pass the measure in November, when it will be on the ballot, the county will be able to start collecting tax on that revenue.
Parry said, if passed, the use tax could generate up to $900,000.
The 2018 Boone County budget is scheduled to finalized in April.