Local News

Committee starts review of Petersburg’s sales tax code

A committee of local residents and business owners is taking another look at Petersburg’s ordinance on sales tax – and may be recommending changes including the elimination of tax exemptions for voters to consider next year. Joe Viechnicki reports.

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Every few years, local voters have been deciding ballot questions on local sales tax law, exemptions from sales tax, increases to the rate or tax free days. Some of the proposed changes have come from a committee of elected leaders and business owners. That committee reformed this year and may generate more ballot questions for 2014, since there’s no local election this October.

Committee member Sue Flint, who’s also on the borough assembly, read a mission statement she helped write for the latest committee. “This is what we came up with,” Flint read, “To review the sales tax code, to simplify the code and collection procedures and to generate an equal or greater amount of revenue so the borough does not have to decrease services or increase property taxes.”

The municipality has collected about two point eight million dollars in sales tax the past two years. That number dropped closer to two point six million for the two years before that during the global economic recession.

As part of its review, the committee will be looking at the borough’s long list of exemptions from sales tax. Member Fran Jones thought the committee should look at each exemption one at a time. “There are some that we can’t do anything about, like air charters, WIC, food stamps, medical services, those are already tax exempted by law but the other ones like sales out of the ordinary course of business, rental receipts, there’s a bunch in there that can really be looked at.”

Sales tax is not collected for things like insurance, funeral goods, utilities, items that are bought for resale and goods to be used outside the borough to name a few. It’s also not collected for people over the age of 65 and that looks to be a growing percentage of the local population over the next few decades. Many of the exemptions, including the senior exemption, have been supported by local voters. And ultimately it will be up to voters again which exemptions stay and which go. A year ago, voters said no to an increase in the sales tax cap by a narrow margin. In 2011, voters decided to end the exemption for seniors and non profit organizations purchasing alcohol and tobacco and approved the possibility of up to two tax free days a year.

The committee plans to meet once a month through the winter and hopes to have recommendations to the borough assembly by March. That could mean more ballot questions on sales tax a year from now.

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