Before we can have a full understanding of why the city is facing a financial crisis, we must first have an understanding of taxes – specifically, where tax revenues of the city come from. For now, I’m only going to focus on sales taxes. While there are other revenue sources (grants, donations, STP funds, etc.), they are not a primary source of funding city operations. I will also exclude ‘fees’, such as those from building permits or courts. Again, these are not primary and don’t typically have a significant impact.
Cities in Missouri typically use two forms of taxes for revenue: sales taxes and property taxes. That’s not to say that all cities have a property tax, but a majority do. As of Jan 1, 2010, Neosho does NOT have a property tax. That leaves a sales tax as the sole means of tax revenue for the city of Neosho.
Each sales tax available to any city is governed by statue. Those statues are specific in what the tax may be used for and what the tax rate may be. Below is a table summary.
| Tax Description | Allowable Rates | Neosho’s Rate |
| General Sales Tax | 1/2%, 7/8%, 1% | 1% |
| Capital Improvements | 1/8%, 1/4%, 3/8%, 1/2% | 3/8% |
| Economic Development | Up to 1/2% | 1/8% |
| Transportation | Up to 1/2% | 3/8% |
| Parks/Storm Water | Up to 1/2% | 3/8% |
| Fire Protection | 1/4% | 1/4% |
By statue, the state ‘allows’ cities to collect up to 3.25% in total sales taxes – subject to voter approval. Currently, Neosho collects 2.5%. When added to the combined state/county tax rate of 5.1%, you see the more familiar number of 7.6% – familiar because this is the number you’ll see on most receipts for purchases inside the city of Neosho. (You may see 4.6% on certain food items. This is because the state reduces their portion of the tax by 3% on such items. That reduction has NO impact on city taxes.)
Taxes for neighboring cities
While we’re looking at taxes, I’ve included a few rates from other cities around the area. Some are higher, some are lower, but they are all very close to Neosho’s rate.
| City | Total Sales Tax Rate |
| Neosho | 7.6% |
| Joplin (Newton/Jasper County) | 7.725%/7.835% |
| Carthage | 7.388% |
| Webb City | 7.7% |
| Seneca | 7.1% |
| Anderson | 7.725% |
Next time, I’ll be explaining how these revenues add up for the city of Neosho and how an economic slowdown impacts sales taxes. It won’t be the final answer, but it will add to our knowledge of city finances as we work to get a full understanding of why we are where we are.
No comments:
Post a Comment
All comments are moderated before being posted. Postings are at the sole discretion of the blog moderator. Anonymous postings are no longer allowed. I encourage your comments, but put you name on the bottom line!