City of Union -- stock

Union officials are moving forward with a plan to ask voters to consider a use tax at the April 7 municipal election. 

The topic of a use tax was discussed at the Jan. 6 personnel, finance and public works committee meeting. Aldermen debated the merits of the tax and if should be put on the ballot to be voted on this spring. 

Voters defeated the city’s request to implement a use tax in 2018.

Use tax is a sales tax on items purchased where no sales tax has been paid. The tax is intended to help capture revenue for out-of-state sales, including online purchases from out of state vendors and automobiles purchased outside of Missouri. 

For example, if a person ordered something online and sales tax was not collected, a use tax would be paid instead. 

At a committee meeting in December, Finance Director Heather Keith told aldermen that she’d like to see the city try and get a use tax on the ballot for the April 2020 election. 

According to numbers provided by the Missouri Department of Revenue before 2018, Union “missed” collecting about $49,000 in 2016 and $52,000 in 2017, Keith said. After running the numbers again in 2019, Keith said it looks like the tax could collect $100,000. 

Aldermen instructed Keith to do research on how other cities passed a use tax and to see what Union could do to get it passed after voters roundly defeated the measure in 2018.

On Monday, Keith presented her research to the committee. Cities like Rolla and St. James, which passed a use tax, reached out to the community through open forums, brochures, going to senior centers and a video explaining the use tax. Informing the residents of Union was a key part of the discussion, she said. 

“If people were educated they would vote on it,” Alderman Paul Arand said. 

In addition to the informative work done in the community, the use tax was allocated for a specific purposes, Keith said. 

“Cities used specific purposes for the tax, it goes toward things like law enforcement and animal shelters,” she said. 

The board of aldermen then discussed what the specific use of this tax would be. Vicki Jo Hooper, alderman for Ward 4, suggested that the tax be put toward the parks department, “where people can see it.” 

The committee agreed that, if passed by voters, $100,000 generated from the use tax would go toward the parks department and any excess earned after that initial amount would to the city’s general fund. 

The committee made a motion to write an ordinance for the upcoming board meeting so it can meet the county’s deadline on Jan. 28. If the deadline is met, the use tax would be voted on again this April.

The board’s next meeting is Monday, Jan. 16, at 6:30 p.m.

Use tax rates are the same as the local sales tax rate. In 2018, when Union originally had a use tax on the ballot, the verbiage stated the city wanted the use tax rate to be 2 percent. 

That use tax rate was written to be adjusted along with the sales tax rate. Meaning if the sales tax went up, so would the use tax, if the sales tax went down the use tax would also.