SIKESTON - Missouri will hold its second sales tax holiday this August and those area jurisdictions that aren't required to participate are choosing once again to opt-out of the program.
Last year's holiday garnered rave reviews from shoppers and businesses. The 2003 state law establishing the one-time event, however, allowed cities and counties to opt-out of waiving their local sales taxes. Sixty-six counties and 180 cities took advantage of that provision to avoid losing revenue last year.
Under a bill Gov. Matt Blunt signed into law Wednesday that makes the tax holiday an annual event, only those jurisdictions that didn't participate last year will be allowed to sit out the 2005 holiday, which will be held from Aug. 5 to 7.
As a result, Scott county is locked into waiving their taxes again this year. Even in places where local governments opt out, however, the state's 4.225 percent sales tax will be lifted.
"We have no choice," Scott County Presiding Commissioner Martin Priggel said. "We hoped the legislation would not renew it but they did."
The Scott County Commission looked at the bill really hard before the 2004 holiday to decide whether or not they would participate. In the end, they chose to participate, since they thought it would only be for one year.
Some area businesses asked the commission not to participate in last year's holiday. "It's more paperwork on them to keep their sales tax straight and getting their registers ready," Priggel said.
Priggel is unsure of the effect of the holiday on the county. For cities and counties close to the state line, some shoppers may come across the state line for back to school shopping.
But for Missouri residents, Priggel doesn't think there is too much of an effect. "They all just have so much to spend for school supplies. If they don't spend it one weekend they're going to spend it the next," Priggel said.
Scott county may also be losing some sales tax over the holiday, Priggel said. "We're not sure, everybody in the state is arguing over whether it's losing or making money."
The City of Sikeston is also required to participate in the holiday again this year, according to City Manager Doug Friend. They will also look at the option of opting-out of the program next year, he said.
There is no way to measure how much sales tax revenue Sikeston may have lost as a result of the holiday last year. "It fluctuates over a monthly basis," City Clerk Carroll Couch said. "This is only for three days and we don't get any kind of information that would enable us to compare sales tax receipts on a daily basis."
Friend said there is a balancing effect between the lost revenue and increased sales. "I think the council chose to do it (last year) as an opportunity for people to come in and when they come to town, spend an entertainment dollar," he said.
Area cities that retain the option of sitting out again this year include Caruthersville, Charleston, Kennett, Poplar Bluff, Dexter and New Madrid. And Mississippi, New Madrid, and Stoddard counties may also choose not to participate. However, despite the exemption, any of those jurisdictions can choose to participate this year.
Neither Mississippi nor New Madrid county will be participating, though.
"We didn't have any clothing retailers and we didn't feel like we had enough business to justify going into it," recalled Mississippi County Presiding Commissioner Jim Blumenberg of the county commission's discussion to abstain from the first holiday.
Dollar General Store and Fred's are the only two stores in the county that sell the items included in the sales tax waiver. "We feel like most of the shopping for back to school is done out of town," he said.
However, the county may consider participating in the future, depending on what businesses are in Mississippi county. "We just go from year to year," Blumenberg said.
New Madrid county also voted not to participate this year, said Clyde Hawes, presiding commissioner.
"Being a second-class county, our expenses are greater, and although our revenue is running a shade ahead of last year, we have a deficit budget for this year," he said. "We're in hopes that by maintaining the current sales tax we can maybe balance this budget this year."
Hawes said it would probably be a minimum amount the county would lose in taxes if they participated, but they need the extra revenue. "We want to collect every dollar we can and operate in the black if possible this year."
The waiver on sales taxes applies to clothing, school supplies and personal computers and software.
For more information about the sales tax holiday, visit www.mochamber.org.
The SEMO News Service contributed to this report.