WHAT IS A USE TAX?
The local use tax is a sales tax imposed on the online purchase of goods by Missouri residents from out-of-state businesses not charging sales tax on purchases. If approved, the use tax rate mirrors the local sales tax.
WHAT'S THE DIFFERENCE BETWEEN A SALES TAX
AND A USE TAX?
The Missouri Legislature is requiring every city to have voters approve EITHER a local use tax or out-of-state motor vehicle sales tax by November of 2018 or lose vehicle sales tax revenues. A use tax would also apply to online sales, something a local sales tax can’t do.
Sales and use taxes WILL NOT and CANNOT be applied at the same time. Shoppers would still pay 2.5% sales tax, Grandview’s tax rate, at local retailers, OR pay 2.5% use tax on purchases made online to businesses with a physical presence in Missouri (Target, Amazon, Walmart, etc.)
IS THIS A NEW TAX?
The City has collected a sales tax on motor vehicles, trailers, boats and motorcycles purchased out of state for 40-50 years. If the use tax isn’t approved by voters, the City would no longer be able to collect it starting in November of 2018, a deadline determined by the state legislature.
A use tax would be a new way of applying our sales tax. The City would be able to collect a use tax on online or catalog sales from out-of-state businesses which also have a physical presence in the state, like a big box or discount store, or which have agreed to collect a use tax, like Amazon.
For those out-of-state businesses with no presence in Missouri, purchasers would be expected to self-report, but ONLY if online purchases amount to $2,000 or more annually.
what if I vote
Allows continued collection of up to $600,000 in existing vehicle sales taxes- revenue the City has relied on for 40-50 years.
Adds an estimated $200,000-$400,000 to venue for vital city service like police, fire and public works.
Creates a level playing field for licensed Grandview dealerships with out-of-state dealers, thus keeping business in Missouri.
May eliminate up to $600,000 annually from City budget as of November 2018.
Possible reduction of personnel and services like public safety and public works.
City continues to lose sales tax revenue to online shopping.
Sales volume at local retailers continues to decline as online sales increase, which could jeopardize the future of Grandview retailers.
what if I vote
DO OTHER CITIES
HAVE A USE TAX?
Yes. More than 130 cities in Missouri have approved a use tax including some of our metro neighbors:
Kansas City, MO
St. Joseph, MO
Excelsior Springs, MO
Other cities in the Kansas City metro area are considering putting this issue on the ballot in 2018.
WHAT WILL HAPPEN IF THE
USE TAX IS APPROVED?
The City will keep the estimated $600,000 a year in out-of-state motor vehicle sales tax that it now collects and has collected for 40-50 years. The City could also gain an estimated $200,000-$400,000 annually from online purchases made from out-of-state vendors.
WHY IS A USE TAX SO IMPORTANT?
The main purpose of the local use tax is to create a level playing field for local businesses and to keep sales tax revenues being lost to online sales. Currently local retailers are at a disadvantage with out of state vendors that do not have to collect local sales taxes. The local use tax corrects this loophole.
A use tax also creates equality among all citizens, not just those with access to technology and credit cards.
HOW MUCH REVENUE IS THE CITY LOSING TO ONLINE RETAILERS?
The Missouri Municipal League estimates Grandview is losing between $200,000 and $400,000 in annual sales tax revenue to online sales from out-of-state vendors.
WHAT CAN THE CITY DO WITH THIS REVENUE?
$200,000-$400,000 can help fund increased public safety services, provide 3-7 miles of street improvements a year, or additional street or park maintenance employees.
AMAZON IS ALREADY COLLECTING STATE SALES TAX.
WON'T OUR CITY REVENUE INCREASE?
Amazon is now collecting a state use tax on purchases. Only cities that have passed a local use tax can expect Amazon to collect local sales taxes in the form of use taxes. These sales have grown over the years and will increase annually as shoppers buy more online and less at local retailers.
IF APPROVED, WHEN DOES THE
USE TAX TAKE EFFECT?
April 1, 2018.