Missouri legislature proposes tax holiday

Wednesday, March 19, 2008

SIKESTON -- Most taxpayers are anticipating when they'll receive their economic stimulus rebate. And the state is trying to encourage people to put that money back in the economy -- and working to make the rebates go even further.

Last week, a Missouri House committee proposed legislation that would create a tax holiday for June 27 through 29 that would exempt all items $600 or less from state and local taxes. This would follow the delivery of all checks -- but for some, come almost two months after the money is deposited.

Local government leaders expressed mixed feelings of the proposal, which is expected to come up for debate once lawmakers return to Jefferson City following their spring break.

"We're trying to get the economy going, too," said Dennis Ziegenhorn, Scott County commissioner. "So when lawmakers do these things, you have to look at it as for whether it will be spent in the county."

Ziegenhorn said it would be difficult to gauge how much tax money the county would miss out on. However, he urged people not to spend their rebates to support small businesses and keep the spending local.

Doug Friend, Sikeston city manager, said the City Council has not yet had a chance to discuss the proposal and agreed with Ziegenhorn that it would be difficult to forecast the impact of a potential sales tax holiday.

However, the local economy is sluggish. "We're experiencing no growth in our retail sales," Friend said. "We're actually about 3 percent below where we were last year."

Scott County is experiencing the same decrease. Presiding Commissioner Jamie Burger did not have precise figures, but said that February 2008 figures were "considerably down" from February 2007.

Not having a choice to opt out of the holiday, as governments do for the back-to-school holiday, could put the lower governments in a bind. "This doesn't give us a chance to participate," said Friend. "And the outcome is kind of difficult to swallow."

Jim Blumenberg, presiding commissioner in Mississippi County, agreed. "If you don't have the opportunity to opt out, I don't think that's right," he said.

Burger added that there is more strain due to the state mandate that counties have a budget in place by Jan. 31 -- which is comprised by predicted tax revenues.

"If they want to give away the state sales tax dollar, I don't think there's anything wrong with that," he said. "But the state needs to take care of the state and let the counties take care of the counties."

Blumenberg expressed some concern with the time lapse between when checks will be direct deposited and sent out, which begins in early May, and the tax holiday. "Some people won't even have any money left by that point," he said.

Blumenberg also said the best thing for some to do with the money is apply it to debt.

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