The Reporter covers Miller, Morgan and Camden County in Central Missouri's Lake of the Ozarks and is published once per week on Wednesdays.

 

Published January 22, 2020

City looking to increase taxes


LAKE OZARK – In addition to voting whether or not the city goes into debt to fix the roads, voters on April 7 will also have the choice of voting to pay more taxes in the form of a use tax.

Currently, if someone buys anything out-of-state, the city does not receive any tax on those sales. Approving a use tax would allow the city to collect taxes from out of state purchases that are over $2,000 a year.

What that means is if a Lake Ozark resident goes over to Kansas and buys a boat for $5,000, the city will get nothing in sales tax. If someone bought a boat in the city for $5,000 then the city would collect sales tax.

The ballot measure would fix that problem by collecting sales tax (at the same local rate) on out-of-state purchases that exceed $2,000.

The wording of the ballot measure approved by the aldermen last week and will be on the ballot is:

“SHALL THE CITY OF LAKE OZARK, MISSOURI, IMPOSE A LOCAL USE TAX TO BE USED TO FUND TRANSPORTATION IMPROVEMENTS AT THE SAME RATE AS THE TOTAL LOCAL SALES TAX RATE, CURRENTLY 2.75%, PROVIDED THAT IF THE LOCAL SALES TAX RATE IS REDUCED OR RAISED BY VOTER APPROVAL, THE LOCAL USE TAX RATE SHALL ALSO BE REDUCED OR RAISED BY THE SAME ACTION? A USE TAX RETURN SHALL NOT BE REQUIRED TO BE FILED BY PERSONS WHOSE PURCHASES FROM OUT-OF-STATE VENDORS DO NOT IN TOTAL EXCEED TWO THOUSAND DOLLARS IN ANY CALENDAR YEAR”

The use tax, if approved, will only be applied to transportation projects and will not be able to be used for other purposes.

“It won’t pay 100 percent of improvements, but will pay a chunk of it,” City Administrator Dave Van Dee said.

Funds raised after the road improvements are made would be used to sustain the street program.

“Once the street improvement needs are met, funds raised by the use tax would be used to maintain the streets and build a balance for future needs,” said Mayor Gerry Murawski.

Van Dee stressed that this is not an additional local sales tax. Purchases made locally at Lake Ozark businesses will not be subject to the use tax. It only applies to out-of-state purchases made by Lake Ozark residents from out-of-state vendors.

The use tax is applied to the same type of products that are subject to sales tax paid at the local level.

A sales use tax is imposed where goods and purchases are used as opposed to traditional sales tax which is imposed at the point of sale (a store’s cash register).

More than 200 Missouri municipalities currently have a use tax on file.

Purchases that may be subject to use tax include, according to the Missouri Department of Revenue:
• Mail-order supply purchases
• Furniture and equipment purchased from out-of-state sellers
• Purchases of goods bought over the Internet
• Purchases of goods bought over the telephone
• Cross-border purchases of goods
• Catalog purchases
• Magazine subscriptions
• TV marketing purchases
• Computer software and hardware purchases

The use tax does not apply if:
• You make a purchase from a Missouri retailer and pay to Missouri sales tax to the seller; or
• You make a purchase from an out-of-state seller and you pay Missouri use tax to the seller.

This measure, along with the $6,000,000 question, will be on the April 7 ballot.

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