Title
Review of proposed Use Tax Ballot Language for the April 7, 2020 Election and Discussion Relating to Potential Use of Funds
Body
Issue/Request:
Recently, the City Council has discussed the benefit of a “Use Tax” relating to the shift of economic activity from traditional “brick and mortar” purchases to electronic or “on-line” purchases. As this trend continues to grow, the implementation of a Use Tax, as defined by RSMO 144.757, would help to capture future revenues associated with electronic sales. Attached is the presentation that was made at the November 12, 2019 City Council meeting by Stephen Arbo, City Manager. Based upon this presentation and further City Council discussion, the City Manager received general direction by the City Council to prepare a schedule and documents that would allow the potential placement of a “Use Tax” ballot proposal on the April 7, 2020 General Election. A bill has been prepared for the City Council’s consideration that authorizes the placement of a “Use Tax” proposal on the April 7 ballot. A draft of the bill has been attached.
Key Issues:
The State Law indicates that the use tax shall be at the same percentage amount as the local jurisdiction’s sales tax. If the local jurisdiction raises or lowers the percentage of the sales tax, in accordance with State Statutes, the corresponding Use Tax will also change. Our current sales tax is 2.25%. The following is the proposed schedule necessary to place the use tax on the April 7, 2020 ballot:
· January 7, 2020 - 1st Reading of Ordinance
· January 14, 2020 - 2nd Reading of Ordinance
· January 28, 2020 - Final Certification due to Jackson County Election Board
The State of MO already collects a Use Tax. Based upon their collection from eligible economic Use Tax activity, the City of Lee's Summit would have collected approximately $1.85M in calendar year 2018. If the City Council continues to distribute the Use Tax funds in a similar manner as our local sales tax, the ...
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