Fair Grove Seeks to Impose Use Tax for Online Purchases

Aug 2, 2017

An item on next Tuesday’s special election ballot asks citizens in Fair Grove whether the city shall impose a local use tax.

“If you conduct business on let’s say Amazon.com, this is a way for Amazon who now pays sales tax inside the state of Missouri, to be able to pay sales tax like they would if they were a local brick-and-mortar business,” says Fair Grove Mayor Tim Smith.

Greene County sample ballot for Aug. 8
Credit Scott Harvey / KSMU

According to the Missouri Department of Revenue, a use tax is imposed on the storage, use or consumption of tangible personal property in this state.

It would be equivalent to the local sales tax, and would increase and decrease at the same rate the local sale tax does.

Smith notes that other purchases could trigger the local use tax.

“Any purchase over two-thousand dollars during the calendar year would be self-reported as a use tax, but the biggest impact is going to be for people who make their purchases online.”

One such purchase that could trigger the tax is that of a vehicle, but Smith says even then the additional use tax will only be about two cents for every dollar.

The city of Fair Grove decided to put the question on the ballot to leave enough time to let Amazon know of its decision, and add the city to its electronic payment gateway.

Smith believes an Amazon Distribution Center now in Missouri could help Fair Grove, and “even out the playing field for businesses locally and businesses online.”

Smith says based on studies conducted by the city, this new tax would bring in close to $2,000 in extra revenue.

“So it’s not a huge amount of money, but its money that we would leave on the table, and it sends the message to our local businesses that they are now performing on and even playing field with electronic merchants.”

He adds the measure is one way the city is working to spur economic growth.