Use Tax grows to $1 million+ from meager start in late ‘21

By Buck Collier, Special Correspondent
Posted 7/17/24

HERMANN — Gasconade County officials laughed when the first Use Tax reimbursement check arrived in November of 2021 from the Missouri Department of Revenue.

At $1.74, it was hardly worth …

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Use Tax grows to $1 million+ from meager start in late ‘21

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HERMANN — Gasconade County officials laughed when the first Use Tax reimbursement check arrived in November of 2021 from the Missouri Department of Revenue.

At $1.74, it was hardly worth the effort of putting it in the bank. But less than three years and more than $1 million later, they’re not laughing any more.

“We’ve got more than $1 million from the Use Tax,” noted Southern District Associate Commissioner Jerry Lairmore, R-Owensville, at last week’s County Commission session.

County voters approved the 1.325-cent Use Tax in April 2021 with the tax becoming effective Oct. 1 of that year — after rejecting the tax six times during the previous decade.

“It’s a shame it took that long (to win voter approval) because it benefits the businesses, too, because it levels the playing field,” he added.

The Use Tax is applied primarily to online purchases made from out-of-state vendors who do no have a brick-and-mortar building in the state. That tax benefits Gasconade County Communications, which operates the E-911 Dispatch Center, as well. That agency receives the .325-cent portion of the tax.

This month’s Use Tax check was only $34,116 — the lowest received in any month of this calendar year, coming after last month’s check of $64,966, the largest one received this year. Still, the tax has produced $340,914 through the first seven months of this year.

Last year, the tax produced $535,723; in 2022 it generated $237,081.

That inaugural check of $1.74 in November of ‘21 was supplanted by a $9,399 check in December of that year, making for a grand total in ‘21 of $9,401.

County officials didn’t know what to expect out of the Use Tax; what they knew was that online purchasing skyrocketed during the coronavirus pandemic that ran from 2019-22, evident by the presence of FedEx and UPS delivery vans crisscrossing the county’s roads. Whether online shopping would continue as the pandemic eased and things returned to a more-normal state was unclear.

As it has turned out, Lairmore, the leading advocate for the Use Tax, was right in his belief that ordering products online would remain popular. County administrators offered a generous estimate of maybe $300,000 a year from the tax. That estimate was shattered by late summer of last year with the year-end total of $535,723 leaving everyone in the courthouse shaking their heads in amazement.

Despite the small check received this month, there is a good chance the Use Tax will top last year’s total amount. With Use Tax revenue going to the county’s General Fund bottom line, that would be welcome news.

Indeed, as Presiding Commissioner Tim Schulte, R-Hermann, pointed out, that’s good news that many other Missouri counties aren’t getting.

“Those counties that don’t have it, they’re hurting,” he said, referring to some rural Missouri counties having a difficult time financially. “I feel for them,” he said.

Schulte acknowledged the effort of Lairmore and Northern District Associate Commissioner Jim Holland, R-Hermann, to win voter approval of the tax in April of 2021.

“I’m so glad you guys got it passed,” he said.

Meanwhile, the primary source of revenue for county government — the half-cent General Fund Sales Tax — produced $104,487 for this month’s reimbursement check, down from last month’s $111,666, but $3,700 more than the July ‘23 check.

Thus far this year, the General Fund Sales Tax has produced $716,604, which is $17,000 more than was received by this time last year. County administrators are hoping the year-end total will meet or exceed last year’s total of $1,228,290 — the fourth consecutive record amount of General Fund Sales Tax money.

The county’s third sales tax generator — the half-cent Law Enforcement Sales Tax (LEST) — had another strong showing, the second-largest amount so far of this year at $73,673. Last month’s check of $79,428 was the largest amount of any month since the tax took effect Oct. 1 of 2022.

For the first seven months of this year, the LEST has generated $496,156 for the Gasconade County Sheriff’s Department and $165,385 for the five municipalities that receive a share of the money. The five cities share in 25 percent of the total amount generated. The total amount received so far this year (county and city portions) is $661,524. That compares with the grand total of $1,128,604 produced last year.

Here’s how much the cities received in their July allotments and their totals so far this year: Owensville – $11,296, $76,077; Hermann – $8,840, $59,538; Bland – $1,964, $13,230; Rosebud – $1,719, $11,576; Gasconade – $736, $4,961.