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Use Tax on November Ballot

9/14/2020

Dear Citizens of Portageville,

I wanted to take a moment to discuss an upcoming ballot measure that will be on the November ballot. The City of Portageville will be asking the voters to approve a “Local Use Tax”. Let me be very VERY clear about this ballot measure. This IS NOT a new sales tax. This is a tax that is charged on internet sales ONLY. This tax is already in effect. Our citizens were asked to approve this tax three years ago. The issue has some confusing language and, in my opinion, was not explained very well the first time… so let me take a moment to explain…

Our society is seeing a fundamental shift in how we purchase our goods. More and more, families are opting for the convenience of online shopping. I use online shopping for all my pet supplies for my dog Champ. Up until three years ago, there was no sales tax charged for these online transactions. This would mean Champ’s treats bought at Dollar General would be charged sales tax; however, the exact same treats purchased at Chewy.com would not have sales tax. As online shopping has become more popular, this has led to a precipitous drop in our sales tax revenue.

The State of Missouri, as well as New Madrid County, has adopted this internet “local use tax”. Because the point of sale for an online purchase is your tablet, computer or phone, the State of Missouri recognizes that sales tax may be collected on that sale. This usage tax is ONLY on internet sales and is taxed at the exact same rate as the current local sales tax.

So, if you buy a hammer at Lowes.com, it will have the same tax rate as if you bought it at Woods Lumber. This is in no way a “New Tax.” It is simply accessing the same tax rate on all goods purchased in the City, regardless of if they were purchased in a store or online.

The ballot language reads as follows: “Shall the City of Portageville impose a local use tax at the same rate as the total local sales tax rate, currently 2.25%, 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?  A use tax return shall not be required to be filed by persons whose purchases from out-of-state vendors do not in total exceed two thousand dollars in any calendar year. INSTRUCTIONS TO VOTERS:  If you are in favor of the proposition, place an X in the box opposite YES.  If you are opposed to the proposition, Place an X in the box opposite NO.”

While we all dislike taxes, it is important for the City to adapt the way it collects its taxes as societies shopping habits change. A stable tax base is essential to the City being able to provide the best services our community deserves.

The ordinance to place this issue before voters was passed at our August 3, 2020 meeting of the Board of Alderman. It was adopted in a unanimous vote.

Please feel free to contact me if you have any questions or concerns.

God Bless,

Vince Berry

Mayor, City of Portageville