During the season of back-to-school chaos that thousands of Missouri families face each year, the state in recent years has eased the burden by offering tax-free shopping on school supplies during the first weekend of August. But some taxes kept on working through the holiday.
By state law, local taxing jurisdictions can opt out of the annual sales tax holiday. This year, 50 counties, 156 cities, and 90 Special Taxing Districts decided not to give Missouri families a tax break. Of the 90 Special Taxing Districts, 83 were either community improvement districts (CIDs) or transportation development districts (TDDs). But unlike taxes collected by cities and counties, most of these districts’ sales tax revenues help the private interests that set up the districts rather than funding public services. Many of these districts are found in the most popular shopping areas in the state and encompass large retail stores like Walmart and Target. Some examples include the Arnold Retail Corridor, the Delmar Loop, and the Hanley Road Corridor in Maplewood/Brentwood.
These overgrown microgovernments have already taken over a billion dollars in taxes from Missourians to fund the development or redevelopment of commercial districts, with privately owned businesses reaping the benefits. One 3-day weekend without sales tax revenue would hardly put a dent in the millions collected the other 362 days of the year.
Absent any action from a special taxing district’s board of directors, the district, by default, participates in the tax holiday. However, the board of each of these districts—usually elected by a small number of property owners—instead voted to keep charging the district sales tax rather than give Missouri families a break. Unlike state, county, and city sales taxes, the taxes collected from the special taxing districts formed by developers do not contribute to the funding of public services for the average taxpayer. Instead—perhaps due to the lack of accountability and oversight—they go toward subsidies that primarily help big businesses.
So if you found yourself confused by the presence of a tax amount on your receipt this past weekend, thank the misguided laws that govern special taxing districts.