Voters in Independence and Blue Springs will decide April 3 on whether to adopt a use tax, that is, extend city sales taxes already in place to apply to online sales.
Out of simple fairness, this merits the voters’ approval. Local retailers have been at a tax disadvantage for years compared with their tax-free out-of-state rivals.
A shopper at a brick-and-mortar store pays a total sales tax of 7.85 cents on the dollar in Independence and 8.6 cents in Blue Springs. About one-fourth of that is city taxes, with the majority going to the county and state.
Traditionally being free of those taxes has given out-of-state sellers a significant price advantage. Closing that loophole has caused years of hand-wringing and, more recently, some action. Missouri has begun collecting its 4.225 percent share of these taxes. In Missouri, cities and counties have to go to their voters for approval to do the same, and about 130 cities so far have done so.
We are persuaded by this basic point advocates of this change have made: Local companies are the ones communities rely on for jobs and growth, and they deserve a level playing field. This is a reasonable step to protect what we have.
Also, a secondary but nonetheless strong argument centers on local government finances. Cities, counties and states for decades have relied heavily on taxing retail sales. The migration of sales to online formats has eroded tax bases. In Blue Springs, officials estimate this is costing the city $400,000 a year that could be spent on streets, cops and other services. In Independence, it’s at least $1 million.
It’s arbitrary to say a sweater bought at Kohl’s or Target is subject to a tax and that same sweater from Amazon is not. By the way, the UPS truck that Amazon sends will roll down streets and past cops that come at a cost someone has to bear. Why exempt one group of sales at the expense of another?
Two other points to highlight. First, there is no double-taxation here. Either the sales tax or the use tax applies, not both.
Second, this isn’t a windfall for City Hall. By law, the money is allocated the same way current sales taxes are. In Blue Springs, for instance, an added dollar of use tax would mean 40 cents for the general fund and 20 cents each for parks, public safety and transportation – the levels the voters have approved through the years.
It’s not a simple issue to work through, but the underlying value at play here – fairness – is clear enough. The voters have a chance to make things right.