City councils in Cape Girardeau, Jackson, Scott City discuss internet sales tax ordinances

Published: Jul. 19, 2021 at 6:59 PM CDT
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SOUTHEAST Mo. (KFVS) - City council members in Cape Girardeau, Jackson and Scott City discussed an ordinance that would add internet sales tax, also known as a use tax, in city limits.

Cape Girardeau’s City Council voted unanimously to put the use tax on the ballot of a special election set for November 2.

“Bricks and mortars are paying a city sales tax while outside businesses such as Wayfair and some of your other internet sites are not charging a sales tax, so therefore that revenue is getting lost,” said Scott City’s City Administrator Michael Dudek.

In Scott City, Dudek said buying the process of buying a shirt can hurt local business owners, when shoppers see it in a local boutique and find a better deal online.

“They’re going home online, finding that same shirt, purchasing it, avoiding the sales tax, and therefore that business is lost,” said Dudek.

In April of 2020, Cape Girardeau Mayor Bob Fox said the pandemic could change people’s shopping habits permanently, which is another disadvantage to small businesses.

“It’s totally unfair for those in local business. They have to compete with somebody online, when they have to sell items with sales tax and online you don’t,” Mayor Fox said in 2020.

Business owners aren’t the only people feeling the impact.

According to Dudek, in 2019, Scott City could have made about $250,000 more in revenue if it had a city internet sales tax in place.

“With the pandemic, we have had loses of general revenue. Just as many of the other businesses have suffered, so have the cities,” said Dudek.

The use tax ordinance was last discussed in a study session in mid-July in Scott City.

If the Scott City and Jackson city council members vote to move forward with the use tax ordinance, voters will get the final say on the ballot this November.

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