Troy’s Board of Aldermen approved putting a use tax on the upcoming April ballot, voting to do so unanimously during their Dec. 16 meeting.
The aldermen discussed the pros and cons of placing the tax on the ballot before approving the ordinance. A use tax goes on tangible items bought from out-of-state vendors, which includes internet sales, and stays at the same rate as the established sales tax in the area. A use tax essentially acts as a sales tax on items that have been sold to residents from out-of-state vendors.
Currently, citizens of Troy pay a 4.23 percent sales tax for Missouri, 2.75 percent for Lincoln County, and 2 percent for the city of Troy. The state of Missouri already has an established use tax, and if citizens approved the use tax for Troy, they would pay a total of 6.23 percent on a number of internet and out-of-state purchases.
Alderman Ron Sconce shared that the board recognizes that people are often not fond of taxes, but said that one reason people might consider the use tax is because it levels the playing field for local, brick-and-mortar business.
“Anytime you put a tax on the ballot you run the risk of people assuming that you are promoting the tax. Which, quite simply, we have to put it on the ballot in order to get a decision from the voters,” Sconce said. “The person who’s running a business and has real property and tangible products and a building doesn’t want to be at a disadvantage where people can buy the same item and pay less money for it just because there’s no tax.”
Sconce also noted that it seemed like good timing to put the tax on the April ballot, because they could avoid using the taxpayer’s money on a special election.
Alderman Lisa Anderson said that education about the ordinance would be very important in helping citizens fully understand the tax, and that the board would look into putting information on the website and other methods of spreading awareness.
“If it’s accepted by the voters it would help us generate revenue of course, which is always good. But it would also absolutely help us level the playing field for our local business people and that’s really the thing that the board was considering the most,” Anderson said.
“We’re always looking for a way to make our local businesses more profitable and that’s one consideration. It might not turn the tides for anyone, but it’s one small step in the right direction to making ‘my’ local business a little more on par with Amazon.”