Pierce City approves use tax measure for April ballot

Tuesday, December 19, 2017

Residents will not pay extra for Internet, out-of-state purchases

Pierce City residents will be facing a new question at the April poll whether or not to keep the city's use tax.

"This is a tax imposed on Missouri customers who purchase goods from out-of-state vendors," said Darlene Parrigon, city attorney.

Sales tax rates are based on the point of sale, but a use tax rate is determined by the point of delivery. Local use taxes are distributed in the same manner as sales taxes.

The issue stems from major vendors selling goods to Missouri customers online. Many don't bother to collect the tax to reimburse to the state, county or city.

"Some entities are collecting the tax, but just not paying municipalities what is due," she said. "We have to approve the use tax in order to collect it. We're just enforcing what is already in place."

Exempt from the use tax are purchases of vehicles, trailers, boats and outboard motors. Local sales tax on those items is not paid at the time of purchase, but when they are registered in the county in which the resident lives.

"This is not a new tax," said Julie Johnson, city clerk. "But we have to vote to keep it in order for the city to benefit from it. We have to use it or lose it."

"Frankly, I don't know why any municipality would vote no," said John Archer, mayor pro tempore, at the December meeting of the board of aldermen.

The tax does not apply for online purchases from Missouri vendors. In those cases, the sales tax is based on the vendor's location rather than the buyer's.

The question is set for the April 3, 2018, ballot.

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