Jefferson City exploring a use tax as revenue falls short of projections
Olivia Hayes
JEFFERSON CITY, Mo. (KMIZ)
Jefferson City officials say a use tax could generate nearly $70 million in additional revenue at a time when traditional sales tax is waning.
Jefferson City’s June sales tax report shows the city was short nearly $400,000 of its projected revenue for the fiscal year. The city’s projected 10-year budget showed a need for just over $200 million, but the projected revenue sat just under $80 million. That’s a deficit of more than $120 million.
With use tax, Jefferson City would tax extra on purchases made outside of the city, like online storefronts. According to the Missouri Department of Revenue, the state use tax rate is 4.225%. Use tax does not apply if the purchase is from a Missouri retailer and is subject to Missouri sales tax.
Supporters of use taxes have championed it as a way to recapture revenue lost to increasing internet commerce. They also claim the taxes can level the playing field for local businesses, which must pay sales taxes.
Check back for updates to this developing story.