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Vote "Yes" on Use Tax

November 5, 2017

Dear Constituent:

Use Tax Ballot Question

On Tuesday, residents of Columbia and Boone County will be asked whether a “Use Tax” should be adopted. I plan to vote “Yes” and I encourage you to do the same.

If passed by voters, this measure will require the equivalent of City and County Sales Tax to be paid on taxable purchases from “out-of-state” vendors. At present, the City and County lose millions of dollars per year when Columbia/Boone County residents make online or catalog purchases and do not pay the 2.0% City Sales Tax or 1.75% County Sales Tax. As a result, our public safety and infrastructure programs are currently funded at much lower levels than they were several years ago, when most of those purchases were made at local “brick-and-mortar” stores (see Use Tax FAQs).

Approving these two ballot questions (one for the City, and one for the County) will help plug that loop-hole - supporting local businesses and enabling us to better fund public services. The Missouri Department of Revenue estimates that the City of Columbia will receive $900,000 annually - enough to start catching up on road maintenance needs, reverse recent transit cuts and add new routes, or hire nine additional police officers.

Here's the current situation:

When a Columbia resident makes a taxable purchase from a “brick-and-mortar” vendor within the City of Columbia, the vendor currently collects 7.975% in Sales Tax and remits it as follows (not counting special districts, such as CIDs or TDDs):

  • City: 2.0%
  • County: 1.75%
  • State: 4.225%

When a Columbia resident makes a taxable purchase from an “out-of-state” (ie. online/catalog) vendor which also has a physical presence in Missouri (operations and/or property), the vendor currently collects 4.225% in Use Tax and remits it as follows:

  • City: 0%
  • County: 0%
  • State: 4.225%

When a Columbia resident makes a taxable purchase from an “out-of-state” vendor which does not have a physical presence in Missouri, the vendor currently collects 0% in Sales or Use Tax, but the purchaser is required to self-report the 4.225% Use Tax to the State of Missouri if accumulated purchases exceed $2,000 in the year.

Now, if the City and County Use Tax proposals both pass on Tuesday:

When a Columbia resident makes a taxable purchase from an “out-of-state” vendor which has a physical presence in Missouri, the vendor will collect 7.975% in Use Tax and remit it as follows:

  • City: 2.0%
  • County: 1.75%
  • State: 4.225%

When a Columbia resident makes a taxable purchase from an “out-of-state” vendor which does not have a physical presence in Missouri, the vendor will collect 0% in Sales or Use Tax, but the purchaser will be required to self-report the 7.975% Use Tax to the State of Missouri if accumulated purchases exceed $2,000 in the year, and those funds will be distributed as follows:

  • City: 2.0%
  • County: 1.75%
  • State: 4.225%

It's important to note that no-one will ever pay both Sales Tax and Use Tax, it's one or the other.

One aspect of the Use Tax is problematic to me. Missouri residents shopping with online businesses that do not have a physical presence in the state are currently required to self-report online purchases above $2,000/year and are charged the 4.225% State Use Tax - and the new law will increase this to 7.975%. As I understand it, very few Missouri residents comply with this law and there is no enforcement mechanism nor plans to introduce one. However, this compliance and enforcement problem does not apply to online businesses with a physical presence in Missouri, which includes Amazon.

In summary, the City and County Use Taxes are fair, they will level the playing field for local businesses, and they will generate valuable revenue for our cash-strapped General Funds. Please vote “Yes.”

Addressing Poverty and Racism in Columbia

Over the next two months, I would like to engage as many of you as possible in a community dialogue on poverty and racism. This will take place through this newsletter, in your responses to me and our ongoing individual discussions, and during upcoming Constituent Conversations at Dunn Brothers Coffee.

According to recent census data, about one-quarter of all Columbia residents live below the federal poverty level ($24,600 annual income for a family of 4). Almost one-half of children attending Columbia Public Schools qualify for free or reduced lunch because they are food-insecure at home. And poverty is directly connected with numerous other social ailments such as low educational attainment, low earning potential, a lack of health insurance, poor physical and mental health, and feelings of hopelessness - in a self-reinforcing, multi-generational vicious cycle that undermines the fabric of our entire community. What can we do to break this cycle?

And, as terrible as poverty is, it’s much more prevalent for some groups than for others. Whereas about 10% of White Americans live in poverty, the proportion is close to 30% for African-Americans, Native Americans, and Latinos/Latinas. Here, in Columbia, White unemployment is 4% whereas Black unemployment is 12% - down from about 16% a couple of years ago. Why is “race” such a significant predictor of poverty and statistics on other social issues such as crime and punishment? And what is “race,” anyway? And how about “racism?” And “White privilege?”

These are some of the questions I’d like to discuss with you, and I hope to hear your ideas, opinions, and suggestions for addressing poverty and racism in Columbia. These are vitally important issues for local government, as we strive to create an environment that supports a high quality of life for everyone in this community. In recent years, I have become aware of deeply entrenched inequality in our society, and entered a steep learning curve about these issues and ways to correct them.

During the course of my next three newsletters, I plan to share my thoughts on poverty and racism, provide links to online resources that go much deeper, and ask for your feedback. Here is my proposed schedule:

  • Sunday, November 19: Part 1 - The Poverty Trap
  • Sunday, December 3: Part 2 - A Brief History of Race
  • Sunday, December 17: Part 3 - Beloved Community

I am not an expert in social science - just a concerned member of society who happens to have the privilege of serving on City Council for a while - and so your input is critical. With that in mind, I’d like to kick-off each of these discussions with your responses to an open-ended question. So, to get us started, please send me your thoughts on the following question before November 19:

What do you believe are the causes of poverty?

Residential Parking Permit Program

During the recent budget cycle, I was successful in increasing downtown parking fees to fund the development and implementation of Residential Parking Permit Programs (RPPP) in adjacent neighborhoods.

I have heard from many of you living on Garth, East/West Parkway, Thilly, Westmount, etc., about the problems caused by non-residents parking their cars on these streets. I support RPPPs because they are effective in solving this problem and helping communities transition to a more sustainable transportation future.

I am currently in the process of scheduling a public meeting with City Parking staff to start developing a RPPP for this neighborhood - please let me know if you would like to receive notification of that meeting (which will probably take place in December or January).

Vision Zero Town Hall Meeting

A Vision Zero Town Hall Meeting will be held on Monday, January 22nd (6:00 - 7:30 pm) at the Columbia Public Library. City staff will present initial proposals for achieving our Vision Zero goal of eliminating traffic deaths and serious injuries by 2030, and ask for public input and feedback.

Constituent Conversations

I will hold Constituent Conversations this afternoon (November 5th), and again on Sundays, November 19th, December 3rd and 17th, all from 2-4pm at Dunn Brothers Coffee.

Cheers, Ian