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Sales tax receipts growth slow in county; Dexter still robust

Friday, January 18, 2013


Statesman Staff Writer

BLOOMFIELD, Mo. -- Revenue from two one-half-cent sales taxes in Stoddard County generated only $24,179.13 more in revenue in 2012 than it did in 2011, even though the year started out much more robust. Entering July the county was around $175,000 above the prior year, but sales tax revenue declined in the second half of the year.

On the other hand, the City of Dexter received $184,000 more in sales tax receipts for 2012 than it did in 2011, according to City Admini-strator Mark Stidham. The city has a two-cent sales tax (one-half cent for parks, one-half cent for capitol improvements and one-cent for general revenue). Total receipts to the city totalled $2,864,000 in 2012 compared to $2,680,000 in 2011.

Stidham said it was a record year for sales tax receipts in the city. He noted that while some months ran behind the previous year in revenues, it was made up by larger returns in other months. He explained that it was difficult to compare on

a month-to-month basis because some months have an extra weekend. An additional weekend makes the receipts for that month much larger.

Still, Stidham said Dexter is fortunate to have a growing economy. He noted that sales tax has grown every year in spite of the downturn in the economy dating back four or five years ago. Stidman said the smallest growth was around two

percent when the recession was at its worst. He said

the revenue goes for

park improvements, capital improvements such as the four-lane project on Grant Street and the water expansion on Plaza Heights, street improvements such as the one downtown last year and many drainage projects within the city.

County officials remain concerned about the impact on their sales tax receipts from a Missouri Supreme Court ruling that eliminated local sales taxes on certain transactions. The Supreme Court ruled in March 2012 that local sales taxes cannot be levied on out-of-state

purchases of motor vehicles, trailers, boats and motors. Prior to the ruling, the Department of Revenue collected state sales taxes at the time of registration. The ruling applies to sales between individuals on used vehicles.

The Supreme Court case was a result of action by Craig A. Street, who went to Maryland to buy a boat, outboard motor and trailer which he then brought back to his home in Greene County, Mo. During registration, the Missouri Department of Revenue charged him $100 on the boat, $78.75 on the motor and $12.44 on the trailer in local sales tax.

When the Administra-tive Hearing Commission denied his request for a refund of these local taxes, Street filed a petition with the Missouri Supreme Court.

While the Missouri Supreme Court agreed with the AHC's argument that local governments can impose sales tax to the same extent as the state, the Court ruled that the Missouri General Assembly did not intend the motor vehicle tax be applied to purchases made out of state. The Court said a use tax would apply to out-of-state purchases for vehicles, trailers, boats and motors.

Since that time, no local sales tax has been collected on vehicles, trailers or boats/motors bought out of state, nor has any local sales tax been collected on the sale of used vehicles between individuals.

Prior to the court ruling, the county had been ahead of projections for sales tax revenue in 2012. County Clerk Joe Watson reported at a commission meeting in July that the county was $189,000 ahead of budget projections in sales tax revenue based on the first six months of the year. Afer that, the county received $167,149.80 in sales tax revenue for July, which was $41,067.50 less than in 2011, according to a report from the Missouri Department of Revenue. Revenue from the sales tax has continued to be below 2011 levels since that time.

Department of Revenue reports showed that the county was only $6,595 behind the previous year in sales tax revenue in September, but revenue was $58,000 below 2011 levels in November 2012. December continued that trend as revenue from the sales tax dropped $24,179.13.

Overall, Stoddard County collected $2,739,011.40 in sales tax revenue in 2012. That compares to $2,714,832 in 2011. The tax in 2011 was $80,400 above the levels in 2010, which showed an improving economy after a couple of years of flat or negative revenue growth.

Former Commissoner Frank Sifford warned at a meeting in October that the county still has not felt the impact of the court ruling. The legislature passed a bill to restore the tax, but it was vetoed by Gov. Jay Nixon. Nixon said it would be implementing a new tax. One alternative is to levy a use tax, which the court said was legal. Stoddard County does not have a use tax.

It is hard to say what impact the court rulings have had on local sales tax receipts in light of the differences between the county and those by the City of Dexter. One thing is certain, the county sales tax failed to show as much growth as in past years. The tax continued to grow even during the recession, but in the last half of 2012 something happened to cut into the receipts.

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