Voters in Ozark will consider a ballot measure in April that could help their city government have more money for projects and operating costs.
For the second time in two years, voters will consider enacting a use tax on internet-based purchases. At a rate of 2.375 percent, the use tax would mirror the sales tax that people pay at cash registers when they shop in person at any retail store in Ozark.
The Ozark Board of Aldermen voted 4-1 to place the use tax proposal on ballots at its meeting Jan. 6. Ward 1 Alderman Nathan Posten led the charge in support of the use tax, which he said allows Ozark to adapt to the way that its modern residents shop.
“Sixteen percent of current retail sales are online, and they project that to be 26 percent by 2025,” Posten said. “We have a taxing system designed in the 1950s and it’s 2020, and we want to know why we have to raise taxes from time to time, or we want to know why we can’t buy things today like we did yesterday. Well, there’s the reason.”
Posten, quoting from memory, said that he recently read a report that estimated about 9,800 retail stores in the United States closed in 2019.
New York-based Coresight Research puts the number closer to 9,300 retail closures across the country, which is still a 59-percent increase from 2018 when it comes to retailers shutting their doors. Coresight’s findings tracked major retailers, and the report has been cited by CNN Business, CNBC, USA Today and the Los Angeles Times, among many others.
Posten even gave two examples of instances from his own household where he shopped online without paying a local sales tax. He bought Christmas gifts from online retailers in December, and said he also uses a web-based meal delivery service that sends food to his house twice per week. Those were both cases, he said, where Ozark lost out on revenue because he didn’t pay a local sales tax for his items.
It’s estimated that Ozark would see a 15 percent increase in tax revenue, or about $120,000 annually, if voters enacted the use tax proposal set to appear on ballots in April. It is also thought that a use tax would reverse any declines in sales tax revenue.
The Ozark Board of Aldermen approved a budget for 2019 with slightly more than $3 million expected to be generated by a 1-percent general sales tax. Ozark also generates about $520,000 from its property tax levy, plus $1,170,450 from a 3/8-cent transportation sales tax.
The 1-cent sales tax, Posten said, carries more weight than any other revenue producer Ozark has.
“We’re going to fund our community through sales tax, that’s what we decided to do, and now the underlying structure of that has changed, and we haven’t changed the system to accommodate that,” Posten said.
The state of Missouri already requires online retailers to collect a use tax, which is 4.225 percent. Several cities that surround Ozark, including Nixa, Springfield and Willard, have use taxes.
“We’re talking about doing in April what we should have done—what every municipality, and every county, and every taxing district that collects sales tax should have done today—and we want to know why we’re having trouble paying for the things that we could pay for a few years ago,” Posten said. “The costs go up and the revenues go up, but the revenues don’t go up to what we expected. There’s not been a decrease, we’re not bottoming out and things aren’t flatlining, but it’s just that the costs of things go up and we can’t keep up.”
Online retailers will be responsible for collecting the use tax when they sell goods to Ozark residents.
Posten said he will pay more money per transaction for those items, if it means Ozark will get its share for local improvement projects.
“This is going to affect me, but that’s the deal we made. I want roads, I want trails, I want parks, and if I have to pay my fair share to get them, than that’s what I’m going to do,” Posten said.
Ward 2 Alderman Bruce Galloway joined Posten among the four aldermen who voted to place the use tax question before voters.
“I myself am looking forward, I think, to revenue that is previously lost revenue that we can partially recapture as a way of improving revenue for our citizens in addition to sharing frustrations that we have these budget meetings that are simply awful to go through. I am looking forward to a time that we can really provide the services to the citizens that the citizens deserve,” Galloway said.
Support not unanimous
Ward 3 Alderman Jason Shaffer cast the lone dissenting vote against putting the use tax up for vote.
In April 2018, voters in Ozark turned down a similar use tax question by a vote of 611-516.
“It was rejected, and elections do matter. The citizens of Christian County and members of our wards have spoken that they didn’t want this tax. To present it so soon, so quickly—I think that disregards their wishes and also jeopardizes the trust they place with us,” Shaffer said.
As the Ozark city government prepares for a visioning initiative that will lay out a set of priorities to be executed between now and 2030, Shaffer doesn’t want to see a ballot proposal rejection.
“I hate for it to be a misstep where we put our desires, or what we want, ahead of what the instructions from the constituents have been. I fear that this tax will fail,” Shaffer said.
Shaffer said it was important for the Ozark Board of Aldermen to listen when voters tell them “no.” It’s also important for taxing entities to be specific about the projects their tax dollars can accomplish.
“Citizens of Christian County will approve taxes, especially when they’re assigned to specific projects. When the library wanted to have improvements, and they spelled out what it was going to be and what it was for, the citizens stepped forward and approved that. When it was for the transportation improvements to the infrastructure here in Christian County, the citizens stepped forward and approved that, as well,” Shaffer said.
Alderman Ted Smith missed the Jan. 6 meeting due to illness, leading to 4-1 vote. Aldermen John Torgerson and Heather Alder joined Posten and Galloway in voting for the use tax ballot question.
Neighbors to the west
Nixa voters adopted a 1.5-percent use tax in April 2018, with the proposition receiving 50.74 percent of the popular vote.
Nixa began collecting the use tax in September 2018. It brought in $68,504.41 in its first four months of existence. In 2019, use tax collection improved, resulting in an average monthly collection of $35,662 in Nixa, or $427,982.26 in additional sales tax revenue for the year.
In 2019, Nixa collected $2.7 million from a 1-percent general sales tax, and an additional $1.35 million from a 1/2-percent transportation sales tax.
The use tax accounted for about 10.5 percent of Nixa’s total sales tax income of $4.49 million in 2019.
QUESTION: Shall the City of Ozark, Missouri, impose a local use tax at the same rate as the local sales tax rate, currently 2.375 %, 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.
[ ] Yes
[ ] No
If you are in favor of the question, place an “X” in the box opposite ‘YES.’ If you are opposed to the question, place an “X” in the box opposite ‘NO.’