Blue Springs might go to the voters next spring to address what city leaders across the country say is a glaring inequity that hurts both local businesses and city finances.
The City Council on Oct. 30 plans to discuss the merits of what’s called a use tax – applying local sales taxes to online sales. State law allows it if voters agree.
Cities are losing out on millions of dollars, “and we need to remedy that,” said Mayor Carson Ross.
“This is very critical,” he said. He and others addressed the issue at last week’s meeting of the Eastern Jackson County Betterment Council.
Online sales – largely tax free – continue to grow, and municipal leaders say that hurts local economies in two ways. It puts local stores at a competitive disadvantage, and it erodes the finances of city governments, which tend to rely heavily on sales taxes.
Although the economy is fairly strong, Independence City Manager Zach Walker said sales tax revenues in his city – which has a number of retailers with a regional draw such as Bass Pro Shops – will be up only 0.2 percent this year.
Mayor Ross said his city is losing out on $300,000 a year, Lee’s Summit is losing $700,000 and Independence is losing $1 million.
“We recognize that this is a major issue for our cities,” said Blue Springs City Administrator Eric Johnson.
Independence is taking a different approach. The City Council is looking to the business community to step forward and make its case for going to the voters – and officials acknowledge it’s a tricky issue. People understand the fairness question, but then again they like not paying taxes. State Rep. Jeanie Lauer, R-Blue Springs, said legislators ask about this in constituent surveys and people are about 50-50.
“It’s complex,” Walker said, “and quite frankly it’s probably a bit of an emotional one.”
Ross said the city can’t get out and make the hard sell for a yes.
“We’re going to have to rely a lot, I guess, on education,” he said.