Crestwood to participate in state’s sales-tax holiday during first weekend in August


Families can hit up Crestwood stores for tax-free back-to-school necessities this August.

The city’s Board of Aldermen on June 9 gave the go-ahead for Crestwood to participate in Missouri’s annual sales-tax holiday.

The board voted 5-2 against the first reading of an ordinance to opt out of the holiday, which runs from Friday, Aug. 7, through Sunday, Aug. 9, this year.

During those days, clothing, school supplies, computers and computer software won’t carry state, county or city sales taxes. The exemption is limited to $100 per clothing article, $50 per purchase of school supplies, $350 per piece of software and $3,500 per computer or related item, according to the Missouri Department of Revenue.

City sales taxes the holiday will remove from those purchases include: 0.5 percent capital improvement; 0.5 parks and stormwater; 0.25 fire protection and 0.25 local options — a total savings of 1.5 percent.

The majority of surrounding cities have opted out of the holiday, according to the DOR; Sunset Hills and Green Park are two exceptions.

Although Crestwood has participated in the holiday since August 2004, the topic has caused considerable debate among aldermen and the mayor regarding its effect on local revenue.

The board voted last year 5-2 to opt out of the August 2008 holiday, but Mayor Roy Robinson vetoed the decision. The board couldn’t come up with six votes to override the veto, as outlined in the charter, and the effort to opt out of the holiday failed.

Robinson and the aldermen who supported participation for the 2009 holiday said it represents one weekend out of the year Crestwood can support the local businesses that help keep the city afloat financially with sales tax revenue.

Withholding that support could send the wrong message, Robinson said.

“We cannot afford to have any more businesses leave our community, and we need to do everything we can to help them at least know that we’re interested in them doing well,” he said.

In a letter to the board, Economic Development Commission Chairman Forrest Miller wrote that even though Crestwood may lose revenue on tax-exempt items, an influx of consumer traffic that weekend plus the likely purchase of other taxable goods could in fact increase revenue overall.

However, one board member spoke out against that logic.

While he acknowledged voting in favor of the city’s participation from 2004 to 2007, Ward 3 Alderman Jerry Miguel said it would be a “stretch” to think the city could increase its tax revenue over the weekend. If someone bought a $500 tax-exempt computer, it would take another $500 non-exempt purchase for the city to recoup the 1.5 percent local sales tax revenue lost from the computer sale, he said.

“There’s no way to justify that it’s not costing the city in sales tax revenue,” Miguel said. “Who are the winners and losers of this? It seems to me that the businesses and the few people that shop there are the winners and the losers are this municipality and its residents. We’re always pointing out that this is where our revenue comes from, yet we’re willing to give this up.”

Further, Miguel said he has become increasingly disappointed with the way businesses advertise the holiday. He noted certain store signs only promote the state tax withholding and make no mention of Crestwood’s participation.

Other board members expressed the need for Crestwood to up the ante on public awareness of the city’s role in the holiday by increasing the use of advertisements and other media. Ward 1 Alderman Darryl Wallach said the city should be creative in promoting the holiday to its own citizens and to residents of surrounding “opted-out” communities — and later even offered part of his aldermanic salary to help fund the effort.

But Miguel argued advertising campaigns wouldn’t make a difference, adding even if Crestwood opted out, people still would save money by not paying state or county sales taxes.

“The difference we’re talking about here is one-and-a-half percent,” he said. “Are shoppers lured by the one-and-a-half percent, or are they lured by the ads that (say) 25 percent off, 50 percent off, buy one get one free? … This sales tax holiday has become passé.”

Because the administration determines city sales-tax revenues only on a monthly basis, it cannot measure the outcome of either participating in or opting out of the holiday, City Administrator Jim Eckrich said. Further, because those numbers have been “all over the place” over the past year, there is no baseline amount from which to measure one weekend’s impact, he said.

Still, Robinson said he takes local store owners’ word when they claim business prospers during the holiday weekend.

One of those owners, Jerry McDonald of Computer St. Louis, said his business’ sales during past tax holidays increase three times above their normal levels.

“Obviously we have computers … and the software that brings them in, but (being) one of the few communities that provides (the tax holiday) is what really draws them in,” McDonald said. “We have people that come in and do pre-shopping, look at what they want and say: ‘We’ll be back.’ That brings traffic into the city, which is what everybody wants. We have repeat sales now because of it; now people know us … we’re a small business … but that’s what brings people in.”

Wallach and Miguel voted in favor of the first reading of the opt-out ordinance.

Ward 1 Alderman Mimi Duncan; Ward 2 Aldermen Chris Pickel and Jeff Schlink; and Ward 4 Aldermen John Foote and Deborah Beezley voted against it. Ward 3 Alderman Paul Duchild was absent.