Columbia city council could set a special election for a new tax

As sales tax revenue in Columbia continues to decline due to the increase in untaxed internet sales, city council members are set to consider placing a use tax on the November ballot to partially offset the loss.

The tax would apply to purchases made outside the state of Missouri that will be used, stored or consumed within the city limits and on which no tax was collected in the state of the purchase.

The U.S. Supreme Court ruled in 1992 that states can’t collect sales tax on things a customer purchases out of state unless the retailer has a brick-and-mortar location in the state.

The proposed use tax rate would be the same as the total local sales tax rate, currently 2 percent.

If approved by voters, the use tax would have very little financial impact on the city in the short term.

According to a council memo on the financial impact, from 2007 to 2016, the city averaged about $45.8 million per year in use taxable sales and purchases. Based on this figure and a 2 percent rate, the city would receive an average annual revenue of $100,000 from a use tax.

The reason the tax would not make an impact is because state and federal legislation prevents it from doing so.

Ward 5 councilman Matt Pitzer told ABC17 News last month that he would be inclined to support a use tax ordinance, even though the impact would be minimal, because it would set up the city to benefit in the long-term if federal and state legislation were enacted.

ABC17 News spoke with council members Ian Thomas, Mike Trapp, Matt Pitzer and Clyde Ruffin, who all said they would be inclined to support the use tax.

Boone County commissioners also indicated they were considering a use tax provision.