When City of Saint Charles voters go to the polls on November 3rd, 2020, they will have the opportunity to vote on Proposition 1, which would impose a Use Tax primarily on the purchase of goods by Saint Charles businesses from out-of-state vendors.
What is a Use Tax?
In the simplest terms, a Use Tax is a tax on the purchase of goods by Missouri businesses from out-of-state vendors. The amount of Use Tax due on a purchase is equal to the Sales Tax rate paid locally. This is not a double tax, but rather an equal tax. Right now, the City of Saint Charles collects 2% in City sales tax on each local purchase. In order to collect the same 2% City tax on out-of-state purchases, state law requires that Saint Charles voters approve a use tax/Proposition 1.
Who Will Be Impacted?
This is not a tax increase. It will impact primarily businesses that make out-of-state purchases . For those of us shopping at local businesses, there is no impact.
When Would I Pay A Use Tax?
Missouri state law says that when individuals make more than $2,000 in purchases from out of state (not including vehicles), the individual must pay a use tax by self-reporting those purchases on annual tax returns and paying voluntarily at that time. This is required for individuals today, regardless of Proposition 1.
What Benefit Does It Bring The City of Saint Charles?
Without a City of Saint Charles use tax, there is an incentive for businesses to buy from out-of-state vendors when purchasing equipment or materials. Passage of Proposition U in the City of Saint Charles would create fair competition for our local businesses.
According to the Missouri Department of Revenue, passage of Proposition U could bring an estimated $1.4 million to the City of Saint Charles annually. The City Council has determined that additional revenues from Proposition 1 would go towards Public Safety and Roads. Many of the fire stations in the City of Saint Charles are aging and in desperate need of repairs and upgrades to ensure that our City Fire Department can provide the best possible service to our citizens. In addition, as technology continues to change and advance in all areas,additional funding would be allocated to the latest technology to assist public safety departments in keeping our City and residents safe in a more effective and efficient manner. Finally, money would be utilized to maintain our roads on an annual basis.