Hollister voters will be presented with a new ballot question when they head to the polls for the April Municipal Election.
Earlier this month, the Hollister Board of Aldermen unanimously passed its first bill of the year, an ordinance to impose a local use tax at the same rate as the total local sales tax rate, currently 2 percent, for general revenue purposes for the privilege of storing, using or consuming within the city of Hollister.
City Administrator Rick Ziegenfuss said this ballot initiative, if passed, would give the city the ability to receive a use tax from out-of-state vendor sales purchased by Hollister city residents.
“If, for example, you do catalog sales, internet sales, a direct solicitation by phone or fax, and they have a business located in the state of Missouri, you already pay the regular sales tax. But if you just buy online, for example, or from one of those other sources, and they don’t have a brick and mortar location, a storage facility or a series of other qualifying presences in the state, you do pay a use tax, but the local jurisdiction doesn’t capture its share,” said Ziegenfuss. “The state has had a use tax since 1959.
“One hundred and fifty other cities in the state have already passed this, but because of Missouri law it requires each taxing jurisdiction to pass the use tax. So we felt it was important to go ahead and place that on the April ballot.”
According to Ziegenfuss, without a use tax in place, Hollister has been unable to collect on hundreds of thousands of dollars.
“Over the past five years we have lost, according to the Missouri Department of Revenue, we have failed to capture $317,593.84 in use tax for purchases that came to our community,” said Ziegenfuss. “So we feel like that money could be well spent for public safety, transportation needs, parks and recreation and the other things that people believe that they would like to see their city work on.
“Right now we believe about $66,000 a year would be additional to come into the city for this and for those purposes.”
Before residents head to the polls in April, Ziegenfuss said its important for Hollister resident’s to understand that the use tax is not a new tax, and most out-of-state vendor’s are already collecting it.
“When you go to your cart online, to check out, it’s already there,” said Ziegenfuss. “So when you get to the check out line at a brick and mortar store and you check out, the sales tax is there. In the future when you check out … online or if you receive catalog sales or whatever, that (use tax) will be collected on those sales and remitted. It’s very simple and … it’s going to the state of Missouri and then those that are authorized to receive it, do.”
Springfield, Aurora, Willard, Nixa and West Plains are just a few of the other surrounding cities who have already passed their own use tax. Hollister residents should also know, according to Ziegenfuss, that the use tax will always reflect whatever the city’s current sales tax rate is.
“It matches your sales tax. So whatever sales tax does, this is a comparable amount. So that is a statutorily correct way of saying whatever your sales tax is, is the same amount your use tax is,” Ziegenfuss said. “If one of those were to change, whatever it changed, if it went up or down that would influence the use tax at the same time.”
This ballot initiative can be passed by a simple majority. Meaning only 50 percent of the voters, plus one, need to vote in favor of this use tax for it to pass.
“The one thing that I am pleased about this ballot language is that yes means yes and no means no,” said Ziegenfuss. “If you vote yes, the tax will be implemented, and if you vote no, the tax will not.”
As the city is unable to advocate for this use tax one way or the other, officials will be working with local organizations to help get the information out so residents can make an informed decision.
The city will also have informational brochures and material available to residents with additional questions.
A use tax was proposed by Branson, but voters rejected the measure during the August 2018 election.