Fulton use tax to land on ballot

A proposed Fulton use tax is headed for the April 7 ballot.

City Council members voted unanimously Tuesday to pass Bill 1561, which contains the ballot proposal, during its public meeting. However, that’s only step one toward making the use tax official. Next, council members will have to convince the public — which has already rejected the use tax at least once, in 2018 — to vote for it.

“I don’t want to see us trying to do this year after year and failing,” Ward 3 council member John Braun said. “At the same time, I don’t want to see it go down without us giving it our best shot.”

A use tax is a self-reported tax placed upon out-of-state purchases — mainly over the internet.

If passed, it would add a 2.5 percent tax to purchases made out of state by Fulton residents. Missouri and Callaway County already have use taxes in place, at 4.225 percent and 1 percent, respectively. Up to $2,000 in purchases per person per year would be exempt, according to the ballot language.

If residents order something online from a business in Missouri, the use tax wouldn’t apply. Likewise, if — for example — you got in your car, drove to Arkansas, bought a boat, paid Arkansas’ sales tax and drove it back to Missouri, the use tax wouldn’t apply. In other words, a use tax applies only where the sales tax doesn’t.

This new proposal varies slightly from the rejected 2018 tax in that the first $200,000 of annual revenue is specifically designated to be used for public safety capital expenditures, with subsequent money going toward the city’s general revenue. The Callaway County Sheriff’s Office regularly uses its use tax revenue to replace aging vehicles and equipment.

“They’re not paying any more; it just picks up where the sales tax leaves off,” Braun said Tuesday.

At the previous City Council meeting, several members expressed confusion about how use taxes work and when they apply. Since then, members have sought clarification from experts and now seem to be fully on-board with the idea.

“We need to make a concerted effort to get information out to voters about what this means,” Ward 1 council member Ballard Simmons said.

Ward 2 council member Jeff Stone pointed out the council as a whole is not allowed to endorse a ballot measure; nor can the city spend money telling people to vote yes. However, individual council members are allowed to express their views, and the city can engage in an information campaign to get the word out about the use tax and its potential benefits.

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