Use Tax to Appear on April Ballot in Cape Girardeau

On Dec. 21, 2015, the City Council approved the first reading of ordinances calling for a “Use Tax” election in April 2016.  The second and third readings of those ordinances was Jan. 4, 2016.  Below is an explanation of the two parts of the “Use Tax” question on the April 5, 2016 ballot:
Sales Tax on Titling of Out-of-State Vehicles, Boats, Outboard Motors

  • An extension of a current tax set to expire if not renewed by November 2016
  • This tax would apply to out-of-state vehicle purchases titled in Cape Girardeau.
  • The rate will match the local sales rate which is currently 2.75%
  • Eliminates tax incentive to buy vehicles out of state and out of Cape Girardeau, thus supporting local businesses and saving jobs.
  • Typical annual revenue: $200,000
  • Supports the annual operating budget (employees, supplies, etc.) of city services such as police, parks, maintenance, etc.

Use Tax

  • Use Tax would apply to things purchased from a different state and “used” in Missouri.
  • Use Tax and Sales Tax are NEVER charged on the same purchase.
  • Those not paying the County and State Use Tax now, won’t likely pay the local Use Tax. This tax is primarily charged on business purchases.
  • The rate will match the local sales rate which is currently 2.75%
  • Estimates indicate at least $1,250,000 annually based on businesses that currently pay the state and county use tax.

The list below reflects staff and Council discussion to-date, and is subject to Council’s continued review and final decision. Council stated that the timing of these projects and new hires could be adjusted by future Councils and staff as needed.

  • Keep three grant-funded police officers already on-duty       $    165,000
  • Replace Restaurant Tax funds for police station*                    $    333,000
  • Up to 7 Additional Police Officers (as per council direction)   $    385,000
  • Fire Training Officer                                                                       $      70,000
  • Safety Coordinator                                                                         $      70,000
  • Public Mental Health Professional Services (Police Dept.)      $      92,000
  • Business Support: Eliminate Gross Receipts Tax                      $    135,000
    (For businesses with less than $1 Million annual gross receipts,
    their annual license fee would change to flat $40)
                                                                                                
    TOTAL   $ 1,250,000

* Restaurant Tax funds could instead be used to maintain, upgrade and market Shawnee Fields to attract larger tournaments with greater economic impact. Related projects will amount to over $3 Million.
 
This information was taken from a preliminary fact sheet for City Council’s use in setting direction for projects associated with this tax. Staff will develop educational material and make presentations to inform the public about this tax
View the complete City Council agenda at cityofcape.org/citycouncil.