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CITY COUNCIL MEETING 07 27 15 (USE & VEHICLE TAXES, BOARD APPOINTMENTS)

Two Issues on City Ballot in November
By CATHERINE STORTZ RIPLEY
July 28, 2015

Chillicothe voters will be deciding two city issues in November - whether to implement a use tax, and whether to continue the collection of a vehicle sales tax. During a workshop meeting Monday evening at City Hall, Chillicothe City Council members unanimously agreed to place both issues on this fall's ballot. A formal vote to place the issues on the ballot is expected to take place during the councils August 10 meeting so that notification can be given to the county clerk prior to the August 25 deadline.

The use tax is similar to a sales tax in that it applies to the same type of items that if purchased at Missouri retailers they would be taxed under the sales tax. The same exemptions also apply such as agricultural purchases and equipment purchases by manufacturers. However, the use tax is imposed on purchases by Missouri residents from out-of-state vendors. Currently, Chillicothe residents pay a statewide use tax and a Livingston County use tax on such purchases, but don't pay a city use tax on purchases out of state. Although difficult to predict revenues if the measure passes, a rough estimate can be made by looking at the dollar amount being collected by the county, according to Chillicothe Auditor Theresa Kelly. Livingston County's use tax collection for 2014 was approximately $98,000, based on the county tax rate of 0.750 percent. Therefore, if the city had the use tax in place in 2014, the city could have received approximately $294,000, based on its tax rate of 2.250 percent. Much of the county's use tax revenue is generated within the Chillicothe city limits; however, not all is, making it difficult to estimate how much revenue would come into the city if the use tax measure was in place. Council members discussed how revenues would be used if the use tax is implemented and agreed that the proposal would have better chances of passing if the funds were designated for streets only. Councilman-at-Large David Moore stated that $200,000 annually would not fix the streets, but the council agreed that such funds would help maintain them. It is expected that the council will approve ballot language specifying that all the tax revenues from the use tax would be designated for streets only.

The other ballot measure proposed for November is the continuation of a local sales tax that is currently collected on vehicles purchased from sources other than licensed Missouri dealers, such as individuals or out-of-state dealers. Municipalities throughout the state have the option of placing the vehicle tax measure on their ballots no later than November 2016, following recent legislative action. The legislature passed bill requiring every city in the state that did not have a use tax in place before August 29, 2013, to have an election and to place on the ballot the issue of whether or not to continue the local sales tax on purchases of vehicles, trailers, boats and outboard motors purchased from anybody except a licensed Missouri dealer. If the measure is approved, there essentially would be no changes to the way vehicles are purchased. If the local vehicle sales tax is repealed, the tax would go away. Failure to pass this ballot measure would mean that the city would be able to collect sales taxes only on vehicles purchased from Missouri dealers. Discussion of these ballot measures took place during the council's workshop meeting in the conference room at City Hall.

During this meeting, the council also discussed seeking bids for a truck for use by the Chillicothe Fire Department and the condition of Litton Road, which runs north-south on the east side of Green Hills Golf Course.

During the regular council meeting, Matt Wenzel, chief executive officer of Hedrick Medical Center, provided his final report to the council, as he is leaving HMC to become president and CEO for Saint Luke's North Hospital, effective August 10.

The council also confirmed Mayor Chuck Haney's recommendations of Larry Heisey to the Airport Board and Ben White to the Planning and Zoning Board. Heisey said that the Chillicothe airport is a "real jewel" among airports in north Missouri and said he is pleased to be serving on the board. He said great things are happening with the facility, including a runway expansion project. Heisey fills the vacancy created by Kyle Marcolla, who resigned. White is employed with Main Street Chillicothe and said he is looking forward to serving on the board. He fills a vacancy created by the resignation of Brent Anderson, who moved from the area.

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