Joplin Takes Action on E-Fairness

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This is a guest blog post by Councilmember Melodee Colbert-Kean.

People in Joplin, Mo., know how to adapt to change.

Our city got its start in 1873 as a mining boom town, and we’ve been growing and changing ever since. We’ve seen Bonnie and Clyde, built our Main Street around historic Route 66, and became a diverse, developed city with a beautiful network of parks and museums.

However, what we’re probably best known for is our resilience in the face of one of the worst tornadoes ever to hit the United States. On May 24, 2011, Joplin was hit by a Category X tornado that destroyed much of our town and cost 161 lives in just minutes. But our local government, businesses, and residents all pulled together in the immediate aftermath of that storm to recover, and we’ve been growing ever since. When 553 businesses were destroyed or severely damaged in the wake of the 2011 storm, we responded by rebuilding 500 of them – and opening 150 more new ones!

Our local businesses are the backbone of our city, and that’s why it’s so important to me personally to close the online sales tax loophole. I’m not just a city council member – I spend most of my time running a restaurant, and I’ve always been an entrepreneur. I understand the role local businesses play in a community.

While no city can afford to leave resources on the table, it’s been particularly important for Joplin to invest in the development and services our residents need, and to have a strong local economy. We’ve got a 7.825% sales tax rate in Joplin, which supports not only our efforts to rebuild, but also our work to invest in our roads and water system, and build our city for the 21st century.

But that’s also a 7.825% unfair disadvantage our local stores face against online sellers, who aren’t collecting that sales tax, and who are luring shoppers away from our downtown. Statewide, Missouri loses out on almost half a billion dollars in uncollected sales taxes.

That’s why this month, I brought together a group of people in Joplin to push for a solution: e-fairness legislation. I invited our U.S. Representative and our U.S. Senators to join members of the Joplin City Council and the Joplin Chamber of Commerce to talk about how the online sales tax loophole is hurting our city, and what to do about it.

One of our senators, Senator Roy Blunt, has long been a supporter of e-fairness, and is a sponsor of the current Marketplace Fairness Act in the Senate. We appreciate his continued efforts on behalf of the residents and businesses in Joplin, and we’re looking forward to working with him to see this effort through to the finish line.

A group of ten people, including me, our mayor, city staff, and several local retailers met with representatives of our congressional delegation on August 20 to talk about e-fairness in our community. It was a valuable opportunity for our legislators to hear how the online sales tax loophole is specifically affecting Joplin.

For instance, one store owner observed that deliberate avoidance of sales taxes was changing the way that people shop. People are ordering large purchases online to avoid paying dozens or even hundreds of dollars in sales tax on that purchase. That means that the stores in our downtown and our mall see less foot traffic, and have fewer opportunities to make even small sales.

Joplin_eFairness_blog5Leadership from our local mall also pointed out that harm to individual retailers in the mall has an even bigger snowball effect on our community. The mall’s financial contribution to Joplin includes not only the impact of the sales taxes its stores collect, but also the hundreds of people employed there, and the property tax the mall pays.

Our city manager, also helped our legislators understand how passing e-fairness legislation would impact our city finances. We’ve been fortunate to have steadily increasing sales tax revenue in Joplin from the growth we’ve experienced as a community. However, we also rely on a use tax on large purchases, such as vehicles, which we need city voters to renew. If e-fairness legislation passed, and we were able to recover some of that uncollected sales tax, we might be able to streamline our system of taxes and fees, and maybe remove some of the existing taxes or fees we currently collect.

While e-fairness is not a new tax, it is up to community leaders to educate their residents about the current unfair system, and what the sales tax revenues in their communities support. While most people don’t want to pay more taxes, we do want roads free of potholes, working sewers, safe sidewalks, and emergency response services.

We also know that times are changing. Most of us shop online because it is convenient. Even with e-fairness, we know that more people will shop online every year. Our retailers are not afraid to adapt to a world in which we can order anything with the click of a mouse. We’re just asking Congress to close this online sales tax loophole, and enable us to have a fair shot in the future.

If you haven’t already, reach out to your legislators. Find out if they support e-fairness, and start a dialogue with your business community. You know they have a lot to say! If you need help, the staff at the National League of Cities can get you started.

Together, I truly believe that we can change minds and make a difference.

About the Author: Melodee Colbert-Kean is a councilmember from Joplin, Mo., and currently serves as NLC’s 1st Vice President.