After years of trying, Fulton finally has a use tax.
On Tuesday, voters favored the tax by a fairly narrow margin: 643 "yes" votes to 514 "no," according to unofficial results from the Callaway County Clerk's office. When the tax last appeared on the ballot in 2018, voters rejected it, 422 "no" votes to 318 "yes."
"The difference this time is the city dedicated the first $200,000 collected each year to police and fire capital improvements," Fulton Director of Administration Bill Johnson said. "I believe the citizens saw the value in providing the first responders some of the equipment they need. The fire union and police union also actively promoted the passage of this issue and I think that was instrumental as well."
Johnson said the city estimates an annual $270,000-$280,000 in revenue from the tax. Money left over after the police and fire departments receive their cut will go into the general fund, which funds departments including streets, parks and recreation, buildings and grounds, and more.
He said he hopes the added income will help make up for sales tax revenue lost due to COVID-19. As of March, the city's sales tax revenue was down 5.5 percent; numbers from April aren't available yet but are expected to be even more dismal.
"Due to COVID-19, people haven't been getting out and buying and spending like they traditionally have," Johnson said. "I think there's been a lot more purchases done online. We look at online sales possibly being a large percentage of all retail sales in the city. We encourage people to shop local, but there's some items people choose to buy online. With the use tax city will begin covering some of those lost revenues."
Members of the Fulton Police Department and Fulton Fire Department expressed joy at the tax's passage.
"We're definitely excited," said Scott Peterson, president of Fulton Professional Firefighters Local 2945. "It really speaks volumes of how much support we have in community. They were the ones that got this through."
He said the money will help provide for new and improved safety equipment for firefighters - one of the union's major focuses.
"I'd like to see the truck replacement program really go far, though obviously it's going to take several years to save that money and earmark it - trucks aren't cheap," he added. "We'd also like to thank the (International Association of Fire Fighters) and the Missouri State Council of Firefighters - they helped us with social media posts."
Peterson said the use tax will go a long way toward improving the relationship between the union and the city, which has historically been rocky (bit.ly/2XtdXeG).
"Even before this use tax came up, our relationship has gotten a lot better," he clarified.
Fulton Fire Chief Kevin Coffelt said the tax will help pay for equipment the department uses every day: trucks, hoses, nozzles, protective equipment and so on. It'll also mean less competition with other city departments for funding.
"(The tax is) going to give us an opportunity to start planning for our capital items like trucks and other equipment," he said. "We'll know what kinda funding we'll have coming in, so we will be able to plan for future purchases."
He thanked voters for passing the tax.
"I want to thank them for their support as always - they've always been there to support us public-safety-wise," Coffelt said.
Fulton Police Chief Steve Myers offered similar sentiments, thanking residents for the support.
"I think it's great," he said. "It'll certainly help us out, especially since the tremendous loss of revenue from the coronavirus."
His department is looking at using the use tax income to help replace some of their old patrol cars and in-car computers (some of which are more than 10 years old - ancient for technology, he said).
"We do have several cars that have well over a 100,000-150,000 miles on them," Myers said. "Those are pretty rough miles. Some are driven 24 hours a day."
Use tax, explained
A use tax is a self-reported tax placed upon out-of-state purchases - mainly over the internet.
The city will add a 2.5 percent tax to purchases made out of state by Fulton residents. Missouri and Callaway County already have use taxes in place, at 4.225 percent and 1 percent, respectively. Up to $2,000 in purchases per person per year would be exempt, according to the ballot language.
"The State of Missouri and Callaway County have both had a use tax in place for a couple years," Johnson said. "If you have not been affected by either of those use taxes, I don't see why you'd be affected by city's either."
If residents order something online from a business in Missouri, the use tax wouldn't apply. Likewise, if - for example - you got in your car, drove to Arkansas, bought a boat, paid Arkansas' sales tax and drove it back to Missouri, the use tax wouldn't apply. In other words, a use tax applies only where the sales tax doesn't.
Johnson said more than 200 communities in Missouri already have sales taxes, so out-of-state-vendors that commonly sell to Missouri residents already have a system to apply use taxes to qualified purchases. The state will notify vendors to add Fulton to the list, Johnson said. If a vendor fails to collect use tax on a qualified purchase, the purchaser should self-report that purchase.
Johnson added he believes the city will start receiving use tax revenue in October.