The Blue Springs and Independence city councils voted unanimously Tuesday night to put a local use tax question to the voters on the April 3 election ballot.
The deadline to have ballot measures certified for the April 3 election is Jan. 23.
A use tax essentially is a sales tax applied to online purchases from companies with a physical presence in Missouri. Proponents say the lack of such a tax currently gives online sellers an unfair advantage, and brick-and-mortar stores many times become showrooms for people going home to buy the items online.
In addition to potentially lost in-store sales for retailers, the proliferation of online sales has resulted in a squeeze for some local governments' budgets, as they experienced no increase or even a decrease in sales tax receipts.
If approved by voters, the tax collected from online sales would be the same as the local sales tax rate – 2.5 percent in Blue Springs and 2.25 percent in Independence.
Independence business leaders made their pitch last month to the City Council about placing a use tax on the ballot.
“We were determined to understand the issue and what it would mean for member businesses and for the citizens,” said Tom Waters, interim president Chamber of Commerce. “Our members cannot continue to thrive when placed on this unlevel playing field.”
Passing a use tax, said Independence Economic Development Council President Tom Lesnak, “ensures the taxes in place will continue to support city services.”
Blue Springs Mayor Carson Ross said the cities' business leaders could do a coordinated campaign similar to a motor vehicle sales tax measure in August 2016.
“If we get a good educational piece to the people and explain it, they have overwhelmingly supported us,” Ross said of voters in Blue Springs.
If voters approve a use tax, the cities theoretically would receive a larger cut from the Missouri Department of Revenue after the state collects all the sales taxes. Amazon, which in 2016 accounted for 43 percent of all online sales, began collecting sales taxes in Missouri earlier in 2017, which the Independence city staff estimated could net about $500,000 a year for the city. A full use tax would mean at least another $1 million annually in tax revenue. Blue Springs city staff estimate a use tax would generate $400,000 annually.
Kansas City, St. Louis, St. Joseph and Springfield are among Missouri cities that have a local use tax in place, and Grandview added itself to that list last November. Columbia and Boone County voters did not approve a use tax in that same election.