Pike Commissioners Add Use Tax to November Ballot

The Pike County Commission has added a County Use tax to the November ballot to address the increasing amount of internet sales over brick-and-mortar locations.

The wording on the ballot reads:

“Shall the County of Pike impose a local use tax at the same rate as the total local sales tax rate, currently at a rate of 2.5625 percent, 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?”

The decision to add the question to the November ballot is a hesitant step for Pike County Commissioners, Chris Gamm, Bill Allen, and Tommy Wallace.

Their hesitation follows the state’s reluctance on collecting taxes from online sales. Missouri is the last state to implement such a tax after Governor Mike Parson signed the Wayfair legislation into law on June 30, 2021. The Wayfair Legislation allows Missouri and local jurisdictions to collect an online use tax that, according to the governor’s press release, “will help protect Missouri’s brick and mortar businesses.”

According to the June 30, 2021, press release, Missouri businesses at the time were losing sales “because out-of-state, online retailers are not subject to the same state sales tax laws that local businesses are.”

Pike County is now following suit after voters in other counties have passed similar sales/use taxes. With an increasingly tighter budget due to rising costs and inflation, the Pike Commissioners say it’s an option voters will need to weigh.

Despite similar taxes passing throughout the state and nation, the Pike Commissioners are worried residents will think this is a tax on using the internet. One of their biggest obstacles is ensuring voters are presented as much information as they can.

“It’s not any additional tax other than what you buy from online shopping services,” Presiding Commissioner, Chris Gamm, explained. “When you purchase something on the Internet, the county will receive the use tax which is the existing rate. There’s no talk of raising any taxes at all. It’s the same as the mom-and-pop shops, Walmart, and County Market all pay. It’s an existing sales tax that is not being collected after the Supreme Court passed the Wayfair tax in South Dakota. That’s what this is based on. Virtually everybody in the nation was able to get an internet sales tax.”

“It’s an existing tax that you would pay if you were shopping right here,” Western Commissioner Bill Allen agreed. “When I purchase stuff on the Internet, it’s not because I don’t want to shop local, it’s because I can’t find that item locally. I’m not shopping online to keep from paying local tax. I want to pay for it, but I can’t always find what I need locally.”

According to the Commissioners, the generated revenue from online sales would go into the county’s general revenue and would benefit county-wide services such as: Roads and Bridges, the Pike County Memorial Hospital, the Pike County Sheriff’s Department, and more.

“The amount of revenue that it will generate for the county will allow us to operate more efficiently,” Eastern Commissioner, Tommy Wallace added. “It’ll really help. Plus, it’ll allow us to operate the jail and Sheriff’s Department more efficiently. We’re at the point right now, where we can hardly afford to run the jail.”

“We can’t hire anyone because we can’t pay competitive wages like our neighboring counties,” Allen added. “People can go to Walmart make $16 to $18 an hour while we’re just starting our jailers between $12.50 to $14 an hour.”

He added that jailers and deputies are in a high-risk scenario when dealing with arrested individuals.

“You’re dealing with a whole different type of people, and our jailers and law enforcement deserve a lot better money than what they’re making now,” Allen continued. “We just can’t afford it. We end up paying a lot in overtime because we can’t hire more. If this passes in November, then we would be able to get more employees out there.”

“They put their lives on the line and the jailers have had some conflicts,” Wallace added. “Is it worth $13-$14 an hour to work there?”

While the Pike County Jail was just one example of where additional revenue from online sales would help, the commissioners stressed that it would help county-wide. They also emphasized that the decision ultimately comes down to the voters.

“We’re not saying how to vote,” Wallace told the Tribune. “We’re just putting the facts out there. The county budget is very tight. When people look at the budget, they don’t always consider maintenance on vehicles and payroll. When the word ‘tax’ is involved a lot of people are not going to like it, but the benefits far outweigh the negatives. This could help improve a lot of county services.”

“A lot of what drives your sales tax is the inflation rate,” Allen added. “It looks like we’re bringing in a lot of money but everything’s costing us more too.”

All three commissioners told the Tribune that even if the ballot passes, the county won’t receive any revenue until after the first quarter of 2023

“Most counties in the state already have this or something like it,” Wallace said. “It’s tricky how to write the wording on the ballot so that it accurately presents the question to the voters. We don’t want people to think they’re getting charged to use the internet. This is just based on online sales.”

According to Gamm, he learned through state hearings when Missouri was preparing the Wayfair legislation that larger corporations such as Amazon have already collected the online sales tax.

Besides wording, the commissioners said one of the biggest obstacles they face is simply getting the information out to the public.

“Plenty of times, there are folks who don’t want anything with the word ‘tax’ attached to it,” Wallace said. “Times are hard right now for everybody, and I understand. All we’re putting out there is that, when you shop online, it would be just like shopping at a store in the county. All that big world out there would be like the county.”

“We’re just looking after the people of Pike County’s best interest,” Gamm said. “We’re trying to keep the county services moving forward.”