Editor's note: This story has been changed to accurately reflect how the city's sales tax is distributed.
Blue Springs voted down an internet use tax in 2018 by a narrow margin, with 53 percent of voters saying no to the city collecting its normal local sales tax for online purchases.
However the state of Missouri is collecting this tax online, leaving only local residents and officials wondering how they will recover this loss of revenue. During the Blue Springs legislative breakfast last Friday, City Council members Jerry Kaylor and Susan Culpepper raised their concerns to state Rep. Dan Stacy, R-Blue Springs.
“As internet sales go up, our tax revenue goes down, and that’s how we run our cities,” Culpepper said, expressing her desire to make it clear the sales tax the internet use initiative would collect is a tax already approved by the voters, and is paid when shopping at local retailers. The initiative would have simply allowed the city to collect it on online purchases.
“We are not talking about a new tax. … We’re talking about a tax that was voted in by the voters and we have not been given the ability to collect the tax that has been voted in,” she said.
Kaylor said every city in Missouri not collecting the tax is hurting.
“The point is the cities do not get their fair-share portion,” he said. “I see the state getting their portion and it bothers me that nobody else in Jeff City wants to help us here in the municipalities.”
Stacy said the internet use tax was discussed on the state’s end, but he sees other ways of helping municipalities struggling under the prevalence of online sales. He gave the example of working with the Streamlined Sales Tax Governing Board, an entity that gathers and combines taxing entities in the state and administers the sales tax. Stacy said several states have made similar agreements, but the idea did not gain traction in the Missouri General Assembly.
“I think that particular methodology has some promise I would like to see implemented in our state. We didn’t get that across the aisle … everybody has their thoughts about what the ultimate result is,” he said.
By not collecting the tax, the city's general fund suffers, according to Culpepper. The city's 1 percent sales tax remains its largest general revenue source and is used for general operations and capital improvements. The city also has 0.5 percent sales taxes approved by voters that go toward public safety, streets and parks maintenance – dedicated taxes that cannot be used for other operations.