Butler, Missouri – March 26, 2021
Butler to seek internet use tax on April 6th, 2021 ballot.
The City of Butler has submitted to the voters a proposal for a use tax on internet sales. This issue will appear on the April 6, 2021, ballot. This question was proposed in 2018 along with the vehicle use tax as well. Although the vehicle use tax passed, the internet use tax didn’t.
Currently, over 160 cities in Missouri collect a use tax on internet sales. This tax is imposed on businesses outside of the City that make sales to Butler residents but do not currently pay any local sales taxes. Businesses in Butler already pay local sales taxes. Imposing this tax allows local retailers to compete on an even playing field with internet competition.
The use tax will match the current rate as the Butler sales tax rate of 3.625%. The use tax will always be based upon the sales tax and will never be more or less.
Based on data from the Missouri Municipal League, the City of Butler estimates it is losing more than $225,000 a year in revenue. This lost revenue must be made up in other places and is getting more difficult to operate without it.
The Use Tax will not increase the local sales tax. For the vast majority of purchases made by Butler residents, passing this proposal will not change anything. The use tax is applied only to online purchases and is only collected only when city sales taxes are not already collected by the seller. The State of Missouri only collects the state portion of the sales tax. Each city must impose a use tax to collect its share of the tax.
To give a great explanation on how this works: If a person in Butler needs to buy a wrench, they can go to a store in Butler and purchase it. When they do, the state and local sales taxes in Butler will apply. If they drive to a big box store in Belton to buy the same wrench, the same state sales tax will apply, but they will pay Belton’s local sales taxes. If they order the item online from that same big box store, the state sales tax will be the same, but the store’s shipping terms will determine whether the buyer will pay Belton’s local sales taxes. Many retail stores consider the transfer of property complete when the customer receives the thing purchased, so in our scenario, we would assume that the state sales tax would be charged, but no local retail sales tax would apply because the actual purchase did not occur in Butler.
For additional information contact the City Administrator, Mike West at City Hall, (660) 679-4182 or email [email protected]