A committee composed of four members of the Trenton City Council has voted to recommend a public vote on enacting a local “use” tax for the city.
The Economic Development Committee on Monday evening discussed the possibility before voting to send a recommendation to the full city council to put the issue on next April’s election ballot.
Members of the Economic Development Committee are Cathie Smith as the chairperson along with Dave Mlika, Duane Urich, and John Dolan.
The use tax is very similar to a sales tax in that it applies to the same type of items that if purchased at retail within the state of Missouri would be taxed under the sales tax. The state of Missouri currently has a “use tax” which equals the total sales tax of four point two two five percent.
The five city of Trenton sales taxes amount to two point six three percent and, by law, the local use tax can not exceed that amount. The city distribution is one percent sales tax for the general fund, one half of a percent for capital improvements, another one half of a percent for city parks, one-quarter of a percent for the fire department, and three-eights of a percent for transportation with those funds earmarked as the local share of costs to replace the 17th Street Bridge.
Grundy County has three sales taxes, each is one half of a percent for a total of one and a half percent. Altogether, state, city, and county sales taxes add up to eight point three five percent within the city limits of Trenton.
The “use” tax is imposed on purchases made by Missouri residents from out-of-state vendors. Cities and counties may impose their own local use tax. The amount of use tax due on a transaction depends on the combined (local and state) use tax rate in effect at the Missouri location where the tangible personal property is stored, used, or consumed. Local use taxes are distributed in the same manner as sales taxes to cities and counties. In Trenton’s case, proceeds from a local use tax would reportedly go into general revenue.
Committee chairwoman Cathie Smith says a promotional effort will need to be taken to educate the community voters on understanding the local use tax issue.
Concerns were expressed by committee members that many citizens are making online purchases with companies that do not have a physical presence in Missouri, thus avoiding paying a local sales tax. Mrs. Smith called it imperative that local businesses need to have a level playing field with the dot com businesses.
Pending a decision on a proposed ordinance by the Trenton City Council, ballot issues such as a local use tax, need to be forwarded to the Grundy County Clerks’ office by a January date for the question to appear on election ballots within Trenton next April.
At the committee meeting last evening, Micah Landes presented reports on the North Central Missouri Development Alliance and Main Street Trenton.
Minutes also were shared from last week’s meeting of the Trenton Convention and Visitor’s Bureau.