Item Coversheet



Staff:
Agenda:
Gayle L. Conrad, CMC/MRCC, Director of Citizen Services/City Clerk
6/1/2015

AGENDA REPORT
Cape Girardeau City Council

15-122



SUBJECT
Action to opt out of participating in the Back to School Sales Tax Holiday.

EXECUTIVE SUMMARY

In 2013 the City Council adopted an Ordinance to participate in the Back to School Sales Tax Holiday, and the city participated in 2013 and 2014.  Council has now directed City Staff to prepare an Ordinance for the City of Cape Girardeau to again opt out of that sales tax holiday.  The sales tax holiday is always the first weekend of August, and in 2015 will run from August 7 through 9, 2015. 

If the Council adopts this ordinance opting out of the sales tax holiday, it will be necessary in the future to adopt an ordinance to opt back into the tax holiday, if the Council so chooses to participate.


BACKGROUND/DISCUSSION
Section 144.049 RSMo established an annual sales tax holiday, known as the "Back to School Sales Tax Holiday" exempting the sale of the following school related items from sales taxes during the first weekend in August.
  • Clothing – any article having a taxable value of $100 or less
  • School supplies – not to exceed $50 per purchase
  • Computer software – taxable value of $350 or less
  • Personal computers – not to exceed $3,500
  • Computer peripheral devices – not to exceed $3,500

The provisions of the statute allow local governments to "opt out" of that holiday and to continue collection of their local sales taxes during that time period. Accordingly, on June 1, 2009, the Cape Girardeau City Council adopted an Ordinance opting out of the city sales tax portion of that Back to School Sales Tax Holiday. In 2013, the City Council adopted an Ordinance to opt back into participating in that Back to School Sales Tax Holiday.  

FINANCIAL IMPACT
During the past two years it is estimated that the financial impact of participating in the Back to School Sales Tax Holiday was a loss of revenue in the General Fund of approximately $20,550 each year. There was also a loss of revenue in the public safety trust fund, the capital improvement sales tax funds, the TTF IV fund, and the park and stormwater sales tax funds.


SUSTAINABILITY: ECONOMIC, ENVIRONMENTAL AND SOCIAL IMPACTS


STAFF RECOMMENDATION
Due to the required notification date to the Missouri Department of Revenue, it is necessary that this ordinance be adopted as an emergency measure.

BOARD OR COMMISSION RECOMMENDATION
This issued was discussed at the 2015 City Council retreat, and the Council subsequently requested this ordinance be placed on the agenda for consideration.


ATTACHMENTS:
Name:Description:
Opt_out_Back_to_School_Sales_Tax_Holiday.docOpt Out Ord