COLUMBIA — Columbia Mall stores began charging an additional half-cent sales tax Monday on behalf of the transportation development district that carries the mall’s name. And under a new state law, every store within the mall’s district or any other TDD will be required to post a sign indicating the higher sales tax.
State law allows those who own a majority of property within a given area to petition state and local governments for the authority to create transportation development districts. Those districts, in turn, become governmental entities with the authority to charge sales taxes that almost always are used to pay for road projects.
State of MissouriGeneral / 4 percent Conservation / 0.125 percent Parks and Soils / 0.1 percent
Boone CountyGeneral / 0.5 percent Law enforcement / 0.125 percent Roads / 0.5 percent Capital improvements / 0.2 percent
City of ColumbiaGeneral / 1 percent Capital improvements / 0.25 percent Transportation / 0.5 percent Parks sales tax (permanent) / 0.125 percent Parks sales tax (temporary) / 0.125 percent
TDDsEight actively collecting tax / 0.5 percent
TOTAL OUTSIDE TDDs / 7.55 percent TOTAL WITHIN TDDs / 8.05 percent
Missouri Senate Bill 22 requires all TDDs that charge an additional sales tax to “prominently display” the rate of the sales tax at the cash register area. The Columbia Mall TDD is the newest of the 12 TDDs in Columbia.
Mall shoppers will pay an extra half-cent sales tax on every dollar they spend. That means a person who spends $100 at the mall will pay an extra 50 cents in sales tax; a $1,000 shopping spree would bring an extra $5 in sales tax. The extra charge also raises the sales tax on most products from 7.55 percent to 8.05 percent.
“Whatever tax it was before, they charge a half-cent more,” city Finance Director Lori Fleming said.
While an extra 50 cents on every $100 might seem inconsequential, TDDs in Columbia collectively charged more than $1.8 million in extra sales taxes in fiscal 2007, according to city records.
Some of those higher charges might have slipped by shoppers because it wasn’t until the end of August that stores were required to alert customers that they were charging extra taxes.
The Western Missouri TDD Association will provide stores at the Columbia Mall with the stickers, but the association will not regulate where the stickers will be placed.
Senate Bill 22 includes no specific provisions for enforcement. Katie Essing, Columbia Mall’s senior general manager, said the mall will not be in charge of enforcing sticker placement. Most of the mall’s stores received stickers Tuesday and should have them posted by Friday.
“It’s a basic two-inches-by-three-inches white sticker,” Essing said. “There’s not a lot to it. It really is just printed on a label.”
The city will be in charge of collecting the Columbia Mall TDD tax until the TDD takes over. In return, the city will receive a 1 percent collection fee. City Counselor Fred Boeckmann indicated in a report to the City Council that although the TDD is still finalizing arrangements to collect the tax, it is in the best interest of the TDD and city to start collecting the sales tax as soon as possible.
There are 12 TDDs currently listed in Columbia, but not all are charging sales tax.
“I don’t collect on many of those because they don’t have anything to tax yet,” Fleming said.
Proceeds of the tax at the mall, and at two other TDDs, will be used to pay for pending road improvements in the Stadium Boulevard corridor.