Supreme Court ruling on online sales tax could help Columbia’s budget
The Missouri Department of Revenue is looking at changing how the state collects its sales tax.
This comes after U.S. Supreme Court decided last month to allow states to charge taxes on online goods.
Gov. Parson will need give to the Legislative a package of possible proposed changes by January 2019
According to Richard Sheets, the deputy director of the Missouri Municipal League, Columbia is not alone in having low sales tax revenue.
In fact, sales tax has flat lined or declined statewide.
Sheets said the low revenue affects our basic services – “how we fund police, street, fire, all the public service that our citizens rely on.”
Sheets and other officials blame online shopping for the shift.
“Many of our retail sales are taking place out of state, and the way our sales tax laws are structured, retail sales are those retail transactions within the state,” Sheets said.
In efforts to help fix the problem, City Manager Mike Matthes proposed in the 2019 budget to increase property tax.
But Sheets said that may not be the best long-term solution because Columbia is not a permanent home for many.
“It really falls on a certain segment of your community — those who own property. Columbia and our cities are more than just property owners. It’s folks that are there renting property. There’s folks that are transient there,” Sheets said.
Sheets said the state needs to try to solve the sales tax problem or the cities will be forced to eliminate services.
“I think voters are going to have to decide. Do they want to raise other fees, like fees for service? Do they want to raise property taxes? Sure that’s certainly an option, but I think the most likely scenario is cities are going to be forced to reduce service,” Sheets said.
Matthes has proposed a priority-based budget as a new way to help solve local budget issues that arise with declining sales tax.
Matthes said he will dedicate all pre-council meetings to this topic, from October to at least April.
