COLUMBIA – Columbia City Council is meeting about asking voters to pass an out of state tax on November 7th. The tax would impose a 2% tax on items that will be used, stored or consumed in Columbia and items where there was not taxed in the state it was purchased in.
Councilman Matt Pitzer said it would even the playing field for local businesses.
“It’s really setting us up to benefit over the long term,” Pitzer said. “And having a used tax as I see it would enable our local small businesses to compete on a level playing field with many of our large online retailers who have a tax advantage because they aren’t required to collect the local sales tax.”
The tax is on it first read tonight but it could affect your Internet purchases. Councilman Ian Thomas said if it is passed it would greatly help the City of Columbia.
“The purpose for this primarily is to move towards a situation where we can actually collect sales tax on Internet purchases,” Thomas said. “Right now, we can’t do that. As a result, our sales tax revenue are falling compared to the number of people in Columbia, which makes it very difficult for our public safety programs, our infrastructure programs and others that rely primarily on that sales tax.
A public hearing and vote for the measure will be held on August 21st. Online shoppers won’t immediately be impacted if the measure is passed in November.
“Even if this used tax is placed on the ballot and is passed by voters in November that won’t immediately cause sales tax to be placed on Internet purchases because federal legislation and state legislation will also have to be passed before that can be done.”
If the measure does pass in November it would immediately impact developers.
“They very often bring that building materials in from out of town or out of state, and they don’t have to pay any kind of sales tax or any kind of tax on those materials. If the used tax is passed by voters in November then we will be able to charge used tax which is the same value as local sales tax on those building materials that are brought in from out of town developers.”
Developers could also choose to buy the building materials from suppliers in Columbia, in which they would pay tax.