Chesterfield Mayor Bob Nation wants to start off the new year by saluting the Chesterfield Amphitheater team, given that the venue was named among the top 50 in the nation in ticket sales by Pollstar magazine. "It was super to see the comeback at the theater after skipping the 2020 season," he confides.
On a serious note, Chesterfield city council members voted to put Proposition U, commonly referred to as a "use tax" proposal, on the April 5, 2022, municipal ballot. The ballot proposal -- also called the Wayfair bill -- closes a loophole that arose in 1967, which allowed out-of-state vendors to avoid collecting sales tax. Chesterfield City Administrator Mike Geisel estimates the city loses $3 million to $4 million annually in local sales tax revenue by not collecting that tax.
Mayor Nation says the parameters of this particular tax easily are confusing, and that it's important to understand the background on the matter. On June 30, 2021, Missouri Gov. Mike Parson signed into law the Wayfair bill (Senate Bill 153), which allows municipalities to collect a use tax from online retailers that sell and deliver more than $100,000 in tangible goods in Missouri.
The mayor says Missouri was the last state in the nation to close the sales tax loophole. However, to enact the tax, Proposition U must be approved by Chesterfield voters.
"As more purchasers have participated in online shopping, this has had a significant impact on municipal revenues, which affects our ability to provide a high level of city services to residents and businesses. If this measure passes, it will tend to level the playing field for our local, brick-and-mortar establishments, as well as restore revenues that previously existed before online shopping became so prevalent," explains the mayor.
The ballot language is set by state officials and will read: “Shall the city of Chesterfield impose a local use tax at the same rate as the total local sales tax rate, provided that if the local sales tax rate is reduced or raised by voter approval, the local use tax rate shall also be reduced or raised by the same action?”
Mike emphasizes this is not a new tax, and simply restores the tax collecting ability that was allowed in 1967 when the Supreme Court enabled out-of-state catalog vendors to avoid collecting sales taxes unless sellers had physical presences in the state. The ruling created a loophole for online retailers that didn’t exist before, he adds. In 2018, the Supreme Court reversed the decision, which provided the opportunity to recover the sales tax.
Passage of the “Use Tax/Proposition U” proposal is supported by both the Missouri Chamber of Commerce and the Missouri Retailers Association, Mike says.
If approved, the out-of-state use tax collections would go into effect in January 2023.
bnation@chesterfield.mo.us
636.537.4711