Columbia Finance Director Matthew Lue met with reporters Wednesday morning to explain how the use tax on the April 5 ballot could help improve the lives of locals.
If passed by voters, the use tax, also known as a “Wayfair tax,” would impose a 2% sales tax on all out-of-state goods, including online purchases . The tax would not apply to online purchases from a vendor within Missouri. In that instance, you would pay the sales tax rate of the vendor’s location.
“Currently, we do not have a way to collect taxes on those purchases,” Lue said. “And what that does is basically it puts our brick-and-mortar stores at a disadvantage because they do have to collect the tax.”
Boone County also has a use tax on the April ballot. If approved, it would impose a county sales tax of 1.75% on all out-of-state purchases. If both are approved, Columbia residents would have to pay both, in addition to the state’s use tax. This is how sales tax works now in brick-and-mortar stores in Columbia.
“What this use tax would do is tax the online shoppers at the same rate as shoppers that shop at brick-and-mortar stores,” Lue said.
While both Columbia and Boone County have a use tax measure on the ballot, they are two separate taxes that residents will vote on independent of each other, Lue said.
A use tax was previously on the ballot in 2017 , but the measure was narrowly defeated at both the city and county level. Lue thinks it might have failed because of poor communication.
“I think this time we’re trying to get the message out about what the use tax is,” Lue said, “and sort of define it for the people and what the funds are being used for.”
The city estimates that it would see an additional $5.6 million in revenue annually. This would allow the city to hire seven new firefighters and eight new police officers. It would also provide funds for maintenance and repairs of 30 blocks of sidewalk and 15 lane miles of streets annually.
“If everyone were to move to shopping online,” Lue said, “we’d collect no sales tax, which pays for your police, your fire, your roads and your health department. We wouldn’t collect those taxes, and so in turn, we wouldn’t be able to provide those services.”
If approved by voters April 5, the tax would take effect in January 2023, Lue said.
