Voters overwhelmingly approve use tax extension
By Cameron Montemayor
St. Joseph’s use tax will remain in effect for another 10 years after voters overwhelmingly voted in favor of the proposition.
Voters approved the 3.875% tax extension by a near 3-to-1 margin during Tuesday’s election. The proposition received 7,506 “yes” votes to just 2,880 “no” votes.
Moving forward, the city will use $4 million of annual use tax revenue specifically for street maintenance work, such as milling and asphalt overlay projects. Use tax revenue has helped mill and overlay 423 miles of streets since 2016, nearly 47 miles per year.
St. Joseph City Manager Bryan Carter said the wide margin of victory for the proposition is a reflection of how much St. Joseph residents value the condition of their roadways.
“They’re willing to invest in that,” Carter said following the result. “They’ve seen what we’ve gotten out of that program over the last decade.”
Originally passed in 2015, the use tax functions by taxing internet sales and items bought from out-of-state online retailers for use inside city limits. The tax generated $6.9 million in revenue last fiscal year and is expected to increase further this year.
Millions in remaining funds will be directed to a variety of key sales tax funds, such as the police sales tax fund, parks tax, CIP tax and more.
The use tax rate is set at the same rate as the city’s sales tax at 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.
The use tax has also become an important element for municipalities and small businesses as traditional sales tax revenue from in-store purchasing continues to level off, allowing the city to collect a piece of the growing online sales tax revenue pie.
“It really stabilizes the revenue sources both on that street enhancement side and on the internet sales tax side,” Carter said.
E-commerce sales account for nearly 16% of all sales now, according to the U.S. Department of Commerce.
