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The Webster Groves City Council on Jan. 5 approved first and second readings to a bill that would place a local use tax â covering internet purchases and to be called Proposition 1 â on the April 6 ballot. A final vote is set for Jan. 19.
A use tax is a sales tax imposed on the purchase of goods by Missouri residents and businesses from out-of-state vendors. The tax rate would be the same as Webster Groves imposes on local stores and would be assessed only on purchases from out-of-state vendors that exceed $2,000 in any calendar year.
City officials said a local use tax will help level the economic playing field between local retail merchants and out-of-state vendors and that the additional tax revenue will support critical municipal services.Â
The Webster Groves City Council is set to vote Jan. 5 on placing a use tax â covering internet purchases âon the April 2021 ballot.
A use tax is a sales tax imposed on the purchase of goods by Missouri residents and businesses from out-of-state vendors.
âA use tax would create fair competition for our local brick-and-mortar stores,â said Interim City Manager Joan Jadali. âIt would provide the city an equitable amount of sales tax revenue for comparable items purchased out of state, and allow the city to once again receive revenues that have been severely diminished due to online out-of-state purchases.â
The city is proposing a 1.5% use tax. The state of Missouri has had a 4.225% use tax for many years. If approved by city voters, the total use tax for Webster Groves residents making such purchases would be 5.725%. That compares to a 9.238%Â sales tax paid on brick-and-mortar store purchases, which includes state, county and city taxes, Jadali said.