According to the Missouri Municipal League, approximately 230 cities already have use taxes in place, and on the April 5 ballot, another 60 or so municipalities and counties such as St. Louis County (the “County”) and Boone County are putting the question on the ballot. Generally, a use tax is applied to purchases from out-of-state vendors. As it relates to distribution of use taxes, it should be noted that if St. Louis County’s use tax is passed, the distribution of such tax shall be allocated on a per capita basis (i.e., the ratio of the population each city, town, village, and the unincorporated areas of the county bear to the total population of the County), not the Group A / Group B formulation applicable to certain sales taxes under § 66.620 RSMo. If a city’s local use tax passes, that local use tax will be distributed wholly to the specific city, minus 1% to the Department of Revenue for collection. See § 144.759.1 RSMo. If both a county’s and a city’s use taxes are passed, both use taxes would apply to specific out-of-state, online transactions. This will not result in a “double tax” as the transaction would be taxed by two separate taxing entities—much like the operation of a sales taxes at present. If passed, the use taxes are to be set at the same rate as local sales taxes.
If you have any further questions on the methods of use tax distribution, or any other use tax questions, please contact your City Attorney.