By COREY NOLES
Statesman Staff Writer
Joining a slough of other communities and counties, the Dexter Board of Aldermen voted to place a use tax on the April ballot.
A special meeting of the Aldermen was held on Friday afternoon to allow the board to vote on the issue before the final deadline of Tuesday morning. In order for an initiative to be placed on the April ballot, it had to be at County Clerk Joe Watson's office by Tuesday, Jan. 22.
The use tax, if voted in, will have its largest effect on Dexter's revenue through Internet sales.
Currently, the city collects no money on Internet sales, and with the increase in online shopping, that will eventually have an adverse affect on the city's income.
A state or municipality is unable to collect sales tax from an out-of-state business, meaning a business with no physical property inside the state.
Currently, municipalities are also unable to collect sales tax from online purchases from a business that does operate within the state's borders without a use tax in place.
Because taxes cannot be collected and Internet shopping is increasing at such a dramatic rate, this loss in revenue will eventually catch up with the various governmental bodies.
The only way for this money to be collected is through a use tax.
In brief, what the use tax would do is to provide for a portion of the city sales tax to also apply to goods purchased on the Internet from companies with a physical entity in Missouri.
City Administrator Mark Stidham explained several reasons why he believes it is time for a change to be made.
"What we would like to see is Internet purchases be held to the same standards as our local business," he said. "As it is now, our local businesses are at a competitive disadvantage."
Stidham said a person can get online and purchase in some cases the same product, but not have to pay sales tax, and that that is not fair to the businesses who keep the community turning.
"Basically, we would like to see a level playing field," he said. "The local use tax would close this "loophole."
While a city is able to set its use tax rate equal to their sales tax, the City of Dexter is actually asking for less than that.
Ordinance number 4699 proposes a .875 percent use tax be included on the purchase of Internet, mail order and certain other currently exempt items.
Currently, the state already collects 4.225 percent on these items, but because no use tax is in place at the local level, the City of Dexter is unable to collect their portion.
The combined tax would be a total of 5.1 percent.
It should also be pointed out that not everything is eligible for the use tax. If an item is exempt from state and local sales tax, it will also be exempt from state and local use taxes.
The proposal will not increase or change the current sales tax rate.
According to promotional materials designed to educate voters about the use tax, the "funds will be used for capital expenditures related to the growth of Dexter."
"It's time that we look out for our local businesses because they are the first to feel the sting of Internet competition," Stidham said. "After all, they are the ones who support our civic and educational organizations. They're the first ones asked to support local programs and donate for various events and now they need the people they've helped to look out for them."
Stidham said these same businesses pay local sales and property tax as well as employ people in the community who turn around and spend their money supporting other local businesses.
Look for more on this story in future editions of The Daily Statesman.