What it is: Local Use Tax Proposition is a sales tax on internet purchases.
Vote needed to pass: Simple majority.
What it will cost: 2.5 percent on internet purchases.
What it’s about: Byrnes Mill residents are being asked to approve a use tax that would allow the city to collect its 2.5 percent sales tax on internet purchases, just as it does at retail businesses in the city.
City Administrator Adam Thompson said at least some of the revenue from the use tax would fund upfront costs needed to join the Missouri LAGERS pension system, which would benefit all the city’s approximately 20 full-time employees.
The Byrnes Mill Board of Alderpersons would decide how to spend any remaining funds, Thompson said.
He said the city recently became eligible to join the LAGERS program, which would be a big improvement over the current retirement plan in place for city employees.
Thompson said that better pension program would help the city recruit and retain quality employees.
He said the use tax would benefit the city in other important ways.
“It will really help the brick-and-mortar places here that are competing with Amazon,” he said. “Right now, if you go buy things online, there’s no tax for anybody. That makes it harder for the brick-and-mortar stores. This will help alleviate the pressure on brick-and-mortar stores competing with online sales."
The use tax, or internet sales tax, is commonly referred to as the “Wayfair” tax, a term that originates from a 2018 U.S. Supreme Court case, South Dakota vs. Wayfair Inc., that overturned a ruling preventing states from taxing vendors who don’t have a physical presence in that state.
Missouri residents already are obligated to pay state sales taxes on internet sales, but not all vendors collect it. Missouri residents who buy more than $2,000 in untaxed goods and services are supposed to report that on their state income tax returns.
In addition, a Missouri state law went into effect in January requiring businesses out of state to pay Missouri sales taxes only if they had more than $100,000 in revenue during the previous calendar year. However, that new law applies only to state sales tax. Counties, cities and other entities that collect sales taxes must ask their voters to approve a use tax equal to their sales tax rates on internet purchases and other out-of-state sales.
Byrnes Mill tried in 2018 and again in 2022 to get voters to approve a use tax for the city, but both measures failed.