City of Battlefield
Use Tax Informational Campaign
Frequently Asked Questions About The Proposed Use Tax
What is a Use Tax?
A use tax is a sales tax on purchases that are made outside of the buyer’s state of residence. It is applied to taxable items that will be used, stored or consumed in the state where the buyer lives. Essentially, if the purchase would have been taxed in the buyer’s home state, it may be subject to a use tax.
What would be the rate of the proposed use tax?
2.25%, which is the current city sales tax.
Isn’t there already a use tax in effect in the state of Missouri?
Yes, but a decision by the Missouri Supreme Court in 2012 eliminated the collection of local sales tax on out-of-state purchases, specifically on out-of-state vehicle purchases. The State still collects use tax on those purchases and others, but cities lost their portion of that sales tax revenue with that ruling. Cities are able to regain the ability to collect sales tax revenue on out-of-state purchases through voter passage of a city use tax.
Will a use tax increase the city’s tax rate?
No. A use tax would not increase the city’s tax rate. A use tax would be collected at the same rate as city sales tax, currently 2.25%. A use tax would only be applied in situations where sales tax is not being charged, essentially taking the place of sales tax.
Would I have to pay a use tax on top of sales tax?
No. If you pay tax when you make the purchase, you don’t pay it a second time.
What local services would a local use tax fund?
The use tax would fund general revenue projects like public safety, stormwater management and city maintenance.
Why put a use tax on the ballot?
Sales tax revenue funds the operations of the city. The Missouri Supreme Court ruling eliminated the city’s ability to collect some sales tax revenue that was previously being collected, creating a gap in the city budget. Placing the issue on the ballot will allow voters to decide whether or not to close that gap created by the ruling.
Additionally, not having a use tax gives out-of-state businesses an advantage over local businesses who are required to collect local sales tax and pay taxes to the city. A use tax would level the playing field for our local brick and mortar businesses.