By JoEllen Black/Richmond News
The city of Richmond will once again bring the question of a local use tax on the April 2014 ballot.
A use tax is a sales tax, which collects taxes from purchases made out of state or from online retailers, which currently are not taxed. State guidelines require cities to put the ballot measure before voters in order to collect tax revenue. Richmond doesn’t have a sales tax on Internet sales or out-of-state purchases, such as vehicles. However, the state and Ray County do collect tax on purchases made outside Missouri but consumed within the state, as well as online purchases.
Tuesday’s discussion at Richmond City Council’s regular meeting focused on capturing tax revenue from increasing e-commerce and educating voters.
“We believe it’s important for the future of the city,” City Administrator Ron Brohammer told the council. “Sales tax … is a major funding source for the general fund, which funds the police department, fire department, street department and most of our general administration and services.”
In his report, Brohammer pointed to sales strength at this year’s “Black Friday” and “Cyber Monday” sales events. In-store purchases increased 9 percent, but online sales rose 19 percent, compared to last year.
“The trend is clear. Internet sales will continue to increase and in-store sales will increase only slightly or not at all,” he said.
That trend continues to cut into local tax revenue, especially in a community that has lost long-time businesses, like Richmond Apple Market and Larry’s True Value, among others.