St. Clair voters will not be asked to consider a local use tax on the next ballot.

The board of aldermen discussed the tax over a year ago and it’s something not currently on their radar, according to City Administrator Travis Dierker.

He said the reason why it was discussed last year was because of a bill going through the state Legislature regarding vehicles being purchased outside Missouri and if sales tax could be collected on those sales.

“(The board) just felt like the total amount of revenue it would bring in compared to the idea of bringing in a new tax just wasn’t worth it,” Dierker said.

He added that placing the tax on a ballot in the future will depend on the outcome of an internet sales tax that will be applied when residents purchase items on websites such as Amazon.

The city of St. Clair could be missing out on the collection of approximately $20,002 in tax revenue by not collecting a use tax. The total was estimated by the Missouri Municipal League based on 2016 gross sales, not including online sales, and current sales tax.

A use tax would apply only to out-of-state purchases for items such as motor vehicles, boats and trailers. It would help local businesses by “leveling the playing field” between them and out-of-state competitors, officials said.

State statute requires that cities and counties pass a referendum before taxes can be collected on out-of-state purchases.

Use Tax

A use tax is applied when Missouri residents purchase items from out-of-state vendors, according to the Missouri Municipal League website.

Missouri imposes a statewide use tax at 4.225 percent; however, counties and cities can impose an additional local use tax which first must be approved by voters.

“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 stored, used or consumed,” the Municipal League website states.

“Local use taxes are distributed in the same manner as sales taxes.”


A 2012 Missouri Supreme Court ruling states cities and counties can’t collect sales taxes on vehicle, marine and trailer sales if the purchase was made out of state.

The ruling went into effect in March 2012 and some local officials have said local dealers have a competitive disadvantage.

A countywide use tax failed 59.7 percent to 40.3 percent in 2014. It would have been a 1.5 percent use tax, which is equal to the county’s sales tax rate.

If a vehicle is purchased in Illinois, the buyer is not subject to the municipal sales tax, only state sales tax. If a vehicle is purchased in Missouri, for the same price, the buyer still is required to pay the local sales taxes.

The city of Washington is the only entity in the county that still receives local taxes for vehicles purchased out of state through the voter-approved local option use tax.

The city of Washington currently has a 2 percent option use tax. That means Washington could still collect 2 percent in taxes on vehicles purchased by city residents, even if the vehicle came from out of state or from a private individual.

In some cases, Illinois auto dealerships in the past have reportedly advertised that Missouri residents should cross the state line to buy a vehicle to avoid being charged sales tax.

If a use tax was in place, that incentive would be taken away. That’s because the buyer would have to pay the local use tax when the vehicle was brought back to Franklin County.