About the City of Poplar Bluff proposed Use Tax on the August Ballot
Poplar Bluff and Butler County will decide whether to impose a local use tax on purchases made out of state.
The state of Missouri as well as over 130 Missouri cities currently have a use tax in place. The statewide use tax is 4.225 percent the city's proposed tax is 2.25 Percent the same as the city's current sales tax.
What is Use Tax?
A use tax is a sales tax imposed on the purchase of goods by Missouri residents from out-of-state venders/internet. The use tax is applied to the same type of products subject to sales tax. Products exempt from sales tax would be exempt from use tax. Like the state, cities and counties may impose an additional local use tax. The amount of use tax due on a transaction depends on the combined (local and state) use tax rate in effect at the Missouri location where the tangible personal property is delivered. In general terms, the sales tax rate is based on the point of sale, and the use tax is based on the point of delivery.
If you purchase from a Missouri retailer using the internet the use tax does not apply. Typically the sales tax based on the vender's location would apply to the purchase.
Currently Poplar Bluff residents pay a statewide use tax on out of state catalog/internet sales but do not pay a City Use tax on those purchases. You pay sales tax when you purchase from a merchant in Missouri. If you buy something from out of state you don't pay sales tax on that because the sale did not occur in the state.
This tax does not affect your local tax rate on purchases made at local retailers. If you do not purchase from an out of state vendor or out of state internet company then the use tax does not affect you.
What will the tax be used for?
The use tax will be used to replace lost revenue that is not being collected when local residents purchase from out of state vendors and internet sales.
45% of the City's General Fund Revenues comes from sales tax. As more and more residents purchase goods from out of state vendors and from the internet more and more local tax dollars are lost that help operate your city. Currently internet sales account for 10% to 12% of all retails sales. In a few years it could be 25% to 30% of all retail sales. If that is the case then the city of Poplar Bluff could see a reduction of over $1 million in sales tax revenue to the General Fund Budget. That would be a devastating blow to the city as a whole. Lost revenue means lost services like Police and Fire Protection and the maintenance and care of streets and other services.
Passage of this tax levels the playing field for our local businesses with giant internet companies like Amazon. Our local businesses support our community through sponsoring baseball teams and donations that help support places like the Rescue Mission and community projects like the Rodgers Theatre. Our local businesses also provide many jobs for our citizens.
Poplar Bluff has seen tremendous growth in the last couple of years. We are finally returning as a retail hub for Southeast Missouri and Northeastern Arkansas. Let's continue to grow and make Poplar Bluff and Butler County a great place to live, work and play.
I hope this helps explains the use tax; please get out and vote Yes on August 8th for the City of Poplar Bluff and Butler County Use Tax.
Mark Massingham
City Manager
City of Poplar Bluff