Cape Girardeau won't participate in tax holiday

CAPE GIRARDEAU, MO (KRCU) - Missouri’s annual Back-to-School Sales Tax Holiday will take place August 5 through August 7. Several local communities will not participate this year, including Cape Girardeau.

The holiday exempts sales tax on many back-to-school items, such as clothing, computers and school supplies.

Chamber of Commerce Director John Mehner says that consumers will be faced with the choice of buying in Cape Girardeau or purchasing items elsewhere.

"Cape is certainly going to have a ton of options and a ton of places to shop within the city, so there are going to be an awful lot of offerings there regionally that you can’t get some other places," Mehner said. "But for those that are strictly trying to look at dollar amounts, it can make a 3 or 4 percent difference, which if you are buying a computer, that can make a difference."

Cape Girardeau City Council voted not to participate in 2009.

City Attorney Eric Cunningham says it comes down to economics.

"Approximately $60,000 would be lost the City of Cape Girardeau if the city decided to participate in the Back-to-School Sales Tax Holiday. And the City Council did not want, in these economic times, to lose that kind of money," Cunningham said.

Even though some communities will not participate, the state’s 4.225% sales tax will still be waived during the Back-to-School Tax Holliday.

Other Southeast Missouri communities chose to opt out, including Farmington, Ironton, Malden, New Madrid and Ste. Genevieve.

Jacob McCleland, KRCU

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Proposal would replace Mo. income tax with sales tax

KANSAS CITY, MO (KCUR) - A proposal to eliminate Missouri's income tax has captured the fancy of a House committee in Jefferson City. But a budget watchdog group says it would be a risky move, and costly to most Missourians.

The proposal aims to eliminate income tax and replace it with a simple sales tax of 7 percent, not quite twice the present rate. But Amy Blouin of the Missouri Budget Project is concerned that a House committee has endorsed a constitutional amendment to do that.

She says it would take a 12 percent sales tax to maintain state services, even if the tax extends to services including medical care. And it would reduce total taxes paid only for the wealthiest 5 percent.

"95 percent of Missourians would pay more," Blouin says. "We could have severe cuts to education, health care and other services."

Blouin contends that the proposed sales tax is not like the present Missouri sales tax because it applies to services as well as to goods.

“The truth is that this is unlike any sales tax that has ever existed in any state. No state subjects all services to the sales tax like Missouri would under this proposal," Blouin said.

The proposals allow the legislature to exempt some services, but those services are not specified. Blouin says if passed the new sales tax could apply to medical and child care services.

Since it's framed as a constitutional amendment, the proposal would have to be passed by the legislature and be approved by Missouri voters. Petitions for a very similar voter initiative version are also being circulated, reportedly backed by St. Louis millionaire Rex Sinquefield.

Steve Bell, KCUR

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