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By JoEllen Black/Richmond News
Richmond City Council voted Tuesday to place a question on the April 2 ballot whether the city should adopt a tax on out-of-state purchases.
A local use tax, as its termed, would allow Richmond to apply its 2 percent municipal tax on goods, such as computers, TVs and vehicles, that were purchased out of its taxing jurisdiction, but would have been taxable if it had taken place within the city limits.
City Administrator Ron Brohammer said the city had discussed a local use tax for nearly decade, since his first stint as city administrator. During that time, Ray County has adopted a local use tax that has reportedly raised $379,000 in 2012 for county coffers.
“It’s geared toward catalogue, Internet and direct-market sales and would apply to goods purchased out-of-state,” Brohammer told the council in its work session Tuesday. “It’s not an additional tax. It has no effect on local taxes – zero. It’s for goods not currently taxed on out-of-state purchases. Our position is not to advocate but to inform people.”
Richmond council member Carla Hogan said the tax might be a way to level the playing field for local businesses.
“The Internet has taken business from all of our communities,” she said.
“Over the years, billions are being lost to governments because of that,” Brohammer said.
If approved by voters, tax money would go into four city tax categories – general city sales tax, local parks, capital improvements and transportation.