This new year marks a highly anticipated national election, yet the talk of the town centers on issues hitting much closer to home: At its November 4 meeting, City Council adopted its 2020 legislative priorities, two of which impact the business community and could be on the general municipal ballot as early as 2021. The first is a hotel/motel tax, and the second is an internet sales tax.
A Hotel on the Horizon?
A convention center is almost always brought up in any forward-thinking business conversation, so why has a hotel/motel tax not appeared on a ballot yet? According to Jason Gage, city manager for the City of Springfield, the city has to be enabled to put a tax greater than 5% on the ballot by the state legislature before voters can have something to vote on.
“For the hotel/motel tax, there is a cap for cities,” Gage says. “However, the state of Missouri is known to use special legislation quite often, and Kansas City and St. Louis have the ability to go higher than the 5% level as it relates to, for example, convention and sports-type activities."
Community leaders from the Springfield Area Chamber of Commerce and the Springfield Convention Visitors Bureau are working to convince state leaders that Springfield voters should have the same voting rights as citizens in Kansas City and St. Louis. In the meantime, local leaders are continuing efforts to identify a possible location for a convention center. According to Matt Morrow, president of the Springfield Area Chamber of Commerce, an external analysis has identified two exceptional areas that would be well-suited for a convention center—downtown Springfield near Jordan Valley Park and adjacent to Bass Pro Shops Outdoor World and Wonders of Wildlife.
While there are no plans in place to build a convention center, this adoption into the city’s legislative priorities is the first step to making it happen.
A Clarity Issue
The city wants to clarify whether an internet sales tax is a new tax due to current use tax laws, which, according to Gage, is a legal question for attorneys representing the state legislature. The City of Springfield already has a combined sales tax rate of 2.125 %. If a separate tax is not allowed, the would-be internet sales tax will instead be rolled into the use tax and/or the sales tax. “We do not believe it is right for a product purchased from an online site and located outside the state to cost less than the same product purchased locally simply due to the sales tax,” Gage says. “That appears to be an unfair competitive advantage to online retailers over local retailers.”