Phelps County joined Rolla and St. James in asking voters to enact a local use tax that has a history of voters rejecting the measure in Phelps County; in both August 1996 and April 2016.
History repeated itself at the November special election on Tuesday as residents rejected the Phelps County use tax, yet approved a use tax in Rolla and a use tax in St. James.
Residents in Rolla will have a local use tax at the same rate as the municipal sales tax of 2.25 percent after 56 percent of voters approved the measure.
Missouri statute authorizes the city to impose a local use tax at a rate equal to the city’s local sales tax. If a local sales tax is repealed, the use tax would increase or decrease to an amount equal to the sales tax rate.
Unlike sales tax, which requires a sale at retail in Missouri, use tax is imposed directly upon the person that stores, uses or consumes tangible personal property in Missouri. The use tax applies to purchases made from out-of-state vendors that ship to customers in Rolla.
Numerous cities and counties in Missouri have gone to their voters successfully with the passage of a use tax, Rolla City Administrator John Butz said prior to the election, and voters’ approval of a local use tax will help the city recover its losses.
Rolla has seen revenue derived from the city’s sales tax decline with the steady rise in people shopping online and subsequent decline in residents shopping in the city’s brick-and-mortar stores.
Butz had said the decline in purchases traditionally done in the community had brought about changes to how local businesses operate and how the city operates, since the city uses general sales tax revenue to provide for roads and buildings as well as public safety services.
The situation placed Rolla and Phelps County businesses at a competitive disadvantage of at least 3 percent, Butz had said.
The matter has become “urgent and critical for us,” Butz said with Nov. 5 the soonest election the city could place a use tax initiative on the ballot. Otherwise, the city would have had to wait until the April election.
“We have lots of expenses coming in, as we are looking at the budget over the next several years it becomes a crisis compounded going forward,” Butz had said.
In St. James 53 percent of voters passed the use tax measure. Residents will have a local use tax rate of 2.5 percent.
Phelps County’s use tax measure was rejected by 57 percent of voters. The amount of use tax due on a transaction with Phelps County’s current 1.125 percent sales tax would have been 5.35 percent.
The use tax rate for Missouri is 4.225 percent unless a city or county enacts a local use tax.
* Update will be provided.