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CITY COUNCIL MEETING 06/29/15 (Solar Farm at Old Prison, Ballot Issues/Use Tax and Vehicle Sales Tax)

City Exploring Solar Farm
June 29, 2015

A solar farm is being considered for the former prison property on Third Street. The city of Chillicothe will have a public workshop at 5:30 p.m. on Wednesday, July 8, to discuss the proposal. The project would include a series of solar panels that would produce electricity for Chillicothe Municipal Utilities. The workshop will be in the council chambers at City Hall. Community members and neighbors are urged to attend.

C-T Photo / Catherine Stortz Ripley

The city of Chillicothe Council will hold a public workshop on Wednesday, July 8, at 5:30, at the City Hall Council Chambers to discuss the proposal of an electric utility project that would be on the former prison property on Third Street. A solar farm that would encompass most of the 40 acres would be constructed in the next year according to City Administrator Ike Holland. The former prison is in the process of demolition, and this project would start this fall and be completed by 2016. The solar farm would be a series of solar panels that would produce electricity to CMU electrical department. Chillicothe has been selected as a possible site for the facility along with other towns in Missouri. The City Council is asking the community, neighbors of the former prison, business owners and all interested parties to attend this workshop. There will be photographs of the proposed solar farm and discussion with the public will be on the agenda. Questions about the proposed solar farm can be answered by the CMU director in Chillicothe. Questions about the former prison site, can be answered by the City Administrator at City Hall.


Local Use Tax, Vehicle Sales Tax Being Considered
June 30, 2015

Chillicothe voters will likely see a use tax ballot issue in an upcoming election as well as a ballot question dealing with local sales taxes on vehicles purchased other than from Missouri dealers. City council members discussed both topics during a workshop meeting Monday evening in the conference room at City Hall. No decisions were made as to whether the issues will be put on a ballot. The use tax is similar to a sales tax in that it applies to the same type of items that if purchased at Missouri retailers they would be taxed under the sales tax. The same exemptions also apply such as agricultural purchases and equipment purchases by manufacturers. However, the use tax is imposed on purchases made by Missouri residents from out-of-state vendors. Currently, Chillicothe residents pay a statewide use tax and a Livingston County use tax on such purchases, but don't pay a city use tax on purchases out of state. "You pay a sales tax when you purchase from a merchant in the state of Missouri," City Attorney Robert Cowherd explained during the workshop. "You pay a state sales tax, county sales tax, and in most cities, a city sales tax. If you buy something from out-of-state, you don't pay sales tax on that because the sale did not occur in the state of Missouri. You pay a use tax because you are using it in the state of Missouri." An estimated 200 Missouri cities currently impose local use taxes. Based on use tax revenues in Livingston County, it is estimated that the city would receive around $200,000 annually if a city use tax was imposed. Qualifying items would be taxed at the same rate as the city sales tax if it was imposed. The attorney said that an exemption exists for purchases up to $2,000 per person. "You don't pay any use tax on the first $2,000 in purchases out-of-state per person," he said. "As a practical matter, the only people who pay this are businesses. The reason is that the state of Missouri doesn't audit individual returns." The use tax is sometimes incorrectly referred to as an internet sales tax. However, Cowherd stated, the federal government has said that there are no taxes on out-of-state internet sales unless the seller has a presence in the state of Missouri. "How the use tax will apply to internet sales, that's really out of our hands," Cowherd said. "We have no control over that."

The other possible ballot issue being considered is the continuation of a local sales tax that is currently collected on vehicles purchased from sources other than licensed Missouri dealers, such as individuals or out-of-state dealers. The city currently collects sales taxes on vehicles that are registered by people who live in the city limits, regardless of where they purchase the vehicles - whether from a dealer or a private individual. The Missouri legislature passed a bill requiring every city in the state that did not have a use tax in place before August 29, 2013, to have an election and to place on the ballot the issue of whether or not to repeal the local sales tax on purchases of vehicles, trailers, boats and outboard motors purchased from anybody except a licensed Missouri dealer. Cowherd stated that because of the state statute, Chillicothe needs to have an election on that issue. "What will happen if you don't do it is that if you buy a car from a local dealer you'll pay a sales tax on that," Cowherd said. "If you go buy an identical vehicle from your neighbor or an out-of-state dealer, you would not pay local sales tax." "If you don't have an election, it is automatically repealed on those purchases not from Missouri dealers," he said. "It's hard to figure out exactly what impact that would have, but it will have some impact because there are a lot of private sales. Not only out-of-state sales, but also local private sales would be excluded from sales taxes. It really puts the Missouri car dealers in a very substantial disadvantage." The vehicle sales tax measure could be voted on as early as November 2015 and needs to be on the ballot no later than November 2016. "We need to pass an ordinance to put that on the ballot because the legislature said, 'you shall do that,'" Cowherd said. Failure to pass this ballot measure would mean that the city would be able to collect sales taxes only on vehicles purchased from Missouri dealers. "If I was a Missouri dealer, I'd say it is a matter of fairness and you ought to pass this," Cowherd said.

Vehicle Sales Tax, Use Tax on Council Agenda
June 29, 2015

The City of Chillicothe is considering placing use tax and vehicle sales tax measures on an upcoming municipal ballot. Discussions regarding the proposals will take place Monday during a public workshop at 5:30 p.m. in the conference room at City Hall. The workshop precedes the regular semimonthly council meeting, which is slated for 6:30 p.m. The vehicle tax is an existing tax that is paid for vehicles purchased out of state. That tax is due to expire this year, according to City Administrator Ike Holland. The use tax deals with items purchased out of state over the internet. The state of Missouri as well as many counties (including Livingston County) and cities (including Trenton) have implemented use taxes. Details about both the vehicle tax and the use tax will be discussed during the workshop.

Just a few items are on the agenda for regular council meeting. Items include consideration of a request from the Grand River Historical Society Museum for a portion of the old prison fence and discussion regarding a Simpson Park event. There will be a public hearing at 7 p.m. to consider distribution of capital improvement sales tax funds for the demolition of the old prison buildings on the south side of Third Street. The city had solicited bids for the demolition, but tabled action on the contract pending specifics on funding. The lowest responsible bid was submitted by Derrick Fee, doing business as Red Rock, at a price of $370,200. The city had previously approved using up to $1 million from the Capital Improvements Fund for a developer to transform the property into apartments; that renovation, however, did not reach fruition and the developer was not paid any city funds. The demolition involves razing the former prison property buildings - approximately 16 structures in all. The property will be leveled, the security fence taken down and the iron decorative fence removed. The city has yet to decide whether to sell the approximate 45 acres as one parcel or as individual lots.

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