St. Joseph voters to decide fate of use tax extension Aug. 6

By Cameron Montemayor

A tax that raises millions annually for street repairs in St. Joseph is up for renewal at the polls on Aug. 6.

A proposition put forth by the city is seeking to extend the existing use tax on out-of-state online purchases at a rate of 3.875% for an additional 10 years. Taxpayers would not see an increase in taxes if a majority of voters approve the extension, which would sunset after 10 years.

Originally passed in 2014, the tax generates millions in revenue each year for key street maintenance work and primarily functions by taxing items bought from out-of-state online retailers for use inside city limits.

“So the use tax really does two different things. It allows for collection of the internet sales tax, but it also allows for collection of the traditional use tax,” St. Joseph City Manager Bryan Carter said. “The decision was made to go ahead and seek renewal at this time since it is an important element of our overall budget.”

The tax helped generate $6.9 million in revenue for fiscal year 2023.

The proposition spells out that the city will use $4 million annually in use tax revenue to go specifically toward street maintenance, such as milling and asphalt overlay projects.

“The remaining amounts will go to your other sales taxes. So that’s your general sales tax. But it’s also your CIP sales tax, parks tax and of course, police tax and public safety tax,” he said.

St. Joseph’s use tax rate is set at the same rate as the city’s sales tax rate of 3.875%. If the local sales tax rate is raised or reduced by voter approval in the future, the use tax rate will match the change.

Overall, the tax has provided $34 million, or $3.8 million a year, for the contract street overlay program since 2016. Those funds have been used to mill and overlay 423 lane miles of streets, nearly 47 miles per year.

“One of the areas that every community battles and every community survey is the street quality. Maintaining streets is incredibly important for any community,” Carter said. “We’re getting almost 50 miles a year that is getting a new surface on it that otherwise would not get that new service over time. That adds up. It makes a huge difference in the quality of streets.”

Carter said while it doesn’t guarantee a pothole won’t pop up, the use tax revenue has helped maintain a more robust street maintenance program.

“We’re also starting to increase the amount of work we’re doing on our concrete streets. Those streets hold up for a longer period of time, but they eventually do need maintenance,” he said.

As traditional sales tax revenue continues to level off with increases in internet purchasing habits, the use tax allows the city to collect a piece of the growing online sales tax revenue pie.

Across the U.S., e-commerce sales in the fourth quarter of 2023 accounted for nearly 16% of all sales, an almost 3% increase from 2022 alone.

Use tax revenue for St. Joseph also has increased notably since Missouri Senate Bills No. 153 and 97, called the Wayfair Legislation, went into effect in 2023.

The legislation allows Missouri and local jurisdictions to collect a use tax from online retailers who sell and deliver more than $100,000 in tangible goods to consumers in the state annually.

Sample ballots for the Aug. 6 primary election can be found at www.co.buchanan.mo.us/Aug-6-24-sample-ballots.