Use Tax Initiative

On Tuesday, April 3, 2018, Blue Springs voters will be asked  the following question:

Blue Springs Question #1
Shall the City of Blue Springs, Missouri impose a local use tax at the same rate as the total local sales tax rate, currently two and one-half percent (2 1/2%), provided that if the local sales tax rate is reduced or raised by voter approval, the local use tax rate shall also be reduced or raised by the same action? A use tax return shall not be required to be filed by persons whose purchases from out-of-state vendors do not in total exceed two thousand dollars in any calendar year.

What is a USE TAX?
A local use tax is a tax placed on goods purchased out of state for delivery to and use in Blue Springs. It applies only to transactions where a sales tax was not already charged.  To keep things simple, local use tax is applied at the same rate as the City’s sales tax. A transaction will never be subject to both a local use tax and the City’s sales tax, which is 2.5%.

How is a USE TAX different from SALES TAX?
Purchases made from brick and mortar retail stores already collect local sales tax. If passed, the Use Tax will be applied to purchases made from out-of-state vendors that ship to Missouri (Blue Springs) customers. Out-of-state and online businesses currently do not collect local sales tax.

Approximately half of all Missouri cities with populations of 2,000 or more already have a use tax and many others are considering it in 2018. Some larger cities and area cities that already have a local use tax include: Kansas City • Grandview • Gladstone • Sedalia • St. Joseph • Clinton • Excelsior Springs • Peculiar • St. Louis • Springfield
What does a YES vote mean?
  • Could collect up to $400,000 a year in revenue for vital City services like police services, infrastructure, street maintenance, and parks maintenance.
  • All merchants, both brick and mortar businesses located in Blue Springs and out-of-state and online businesses, will collect the same local sales tax rate.
  • Applies the existing City sales tax rate, 2.5 percent, on goods purchased out of state for delivery to and use in Blue Springs. It applies only to transactions where a sales tax was not already charged.
What does a NO vote mean?
  • The City will not collect approximately $400,000 a year from out-of-state vendors and online sales.
  • Funding reductions on police services, infrastructure, street maintenance, and parks maintenance and other basic services.
  • Out-of-state and online businesses will not apply local sales tax – brick and mortar businesses will continue to collect local sales tax.

Why is sales tax important to Blue Springs?
  • 40 percent of the City of Blue Springs governmental revenue comes from sales tax - the largest single source of revenue.
  • Local sales tax funds police services, infrastructure, street maintenance, and parks maintenance and other basic services.
  • A use tax is described as a “sales tax on goods purchased out of state for delivery to and use in Blue Springs”.
Why does Blue Springs Need a Use Tax?

  • To maintain existing City services, the City needs to modernize its revenue sources to keep pace with current and evolving retail purchasing trends. The shift of consumer shopping to online sales has impacted local sales tax revenues.
  • Voter approval of the use tax means that online purchases made from out-of-state businesses will reflect the same tax rate as the local sales tax. All merchants, both brick and mortar businesses located in Blue Springs and out-of-state and online businesses will collect the same local sales tax rate.
  • A transaction will never be subject to both a local use tax and the City’s sales tax, which is 2.5%.
What Impact Would the Use Tax Have on Blue Springs Revenues?
  • GENERAL fund provides for a number of vital city services such as police, parks, code enforcement and inspections.
  • TRANSPORTATION fund provides services such as street and sidewalk improvements/repairs, street lighting, snow removal, street signs, street sweeping, and tree maintenance.
  • PUBLIC SAFETY Sales Tax is a dedicated tax that supports police operations including personnel, equipment and facilities.
  • PARKS Sales Tax is a dedicated tax that funds parks and deferred parks maintenance needs over the 5-year sunset period.
City staff estimates that a Use Tax could collect up to $400,000 a year in revenue for vital City services like police services, infrastructure, street maintenance, and parks maintenance.
infographics-web