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Marshall City Council places use tax on April ballot

Tuesday, January 15, 2013

By ERIC CRUMP

Editor

The Marshall City Council approved an ordinance Tuesday, Jan. 15, that will place on the April election ballot an issue asking voters to approve a local use tax.

City officials expressed admiration for the informational campaign conducted by Saline County commissioners prior to the November election.

The county use tax issue was successful at the polls, receiving more than 57 percent of the vote.

"I thought they presented it very well," city legal counsel Don Stouffer said. "The county has excellent materials on this."

Stouffer said the proposed use tax is designed to level the playing field for local merchants as they compete with out-of-state online merchants and it helps bolster city revenues.

The use tax option came to the fore last year when a state Supreme Court ruling eliminated the practice of collecting sales tax on out-of-state purchases.

In order to compensate for lost sales tax revenue, cities and counties considered asking voters to approve use tax measures, which match the sales tax rate and are assessed as an alternative to a sales tax. Consumers and businesses pay whichever tax is appropriate, not both.

Because Marshall's sales tax rate is 1.5 percent, the use tax rate will be 1.5 percent if approved by voters.

If voters approve future changes to the sales tax rate, the use tax rate would automatically increase or decrease by the same amount, according to the ordinance.

Individuals who purchase less than $2,000 from out-of-state vendors would not be required to file a use tax return.

Councilman Vince Lutterbie asked whether city officials could say how much revenue Marshall would lose if the use tax is not approved.

City Administrator Connie Latimer said no firm estimate is available, but after consulting with county officials, she believes the amount could be $40,000 to $50,000 per year.

"If we're talking $40,000 to $50,000, that would be a big shot in our arm," she said.

The council voted 8-0 to place the issue on the ballot.

In addition to Lutterbie, council members Dan Brandt, Sheila Cook, Ron Duvall, Tom Hagedorn, Mayor Pro Tem Sam Moten, Gabe Ramsey and Barb Utlaut were present.

The next regular meeting of the council will be at 5:15 p.m. Tuesday, Jan. 22, at the City Office Building, 214 N. Lafayette Ave.

Contact Eric Crump at ecrump@marshallnews.com

Related story:
County officials ask voters to approve out-of-state use tax
www.marshallnews.com/story/1910722.html



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