Potential approval to put a use tax back on the ballot for approval by Branson citizens has become a topic of discussion once again.
According to a staff report from the city of Branson, the state of Missouri 2018 use tax sales report estimates that Branson could collect an additional $558,593 per year if the use tax is approved by voters.
The local use tax would be applied, instead of the local sales tax, on transactions that individuals and businesses conduct with out-of-state vendors, including online, catalog and direct market sales.
The imposition of a use tax is not a tax rate increase, according to the staff report. The purchases would be charged either a sales or use tax, never both.
However, when citizens order something online the delivery truck uses local streets and police investigate if a package is stolen, which uses local resources. The use tax would make it so the out-of-state vendors would collect the same tax rate as local vendors.
The use tax removes the competitive advantage for out-of-state retailers over businesses located in Missouri, according to the staff report.
“We got a report from the Department of Revenue, we did an average annual growth rate from 2009 until 2018 on how much the use tax, the use, and the online sales are growing,” said Jamie Rouch, city of Branson finance director, during a board of aldermen study session. “The Department of Revenue sends out a report, and they say this is how much can be captured from the use tax. So from 2009 to 2018 the average annual growth rate is 12.5% currently, and that’s based off of historical numbers. That’s average, so what we did was also a conservative growth rate, by 2018 $27.9 million was use tax capturable. By 2030, $61.5 million will be. That’s based off of my conservative growth rate, cutting in half that annual growth rate. If you did it by the 12.5% of which is based on historical numbers, $114.7 million would be capturable through the use tax.”
Over 260 Missouri cities have a Use Tax in place, which means their residents pay the same rate whether they buy from a local store or an out-of-state vendor.
Branson voters rejected the use tax in 2018 by a vote of 1,221 to 547. Last summer, aldermen considered putting on the ballot again in November, but they decided to hold off, citing a need to get more information to the voters. It is not known yet when the issue will appear on the ballot again.
The use tax would be imposed at the same rate as the local sales tax, which is currently a total of 2%, including a 1% General Sales Tax, a 1/2% Transportation Sales Tax and a 1/2% Public Safety Sales Tax.
Local businesses currently collect local sales tax, which supports the things in Branson that the citizens say the want, like public safety (police and fire), according to the staff report.
Out-of-state vendors and online stores do not collect a tax to pay for the things that citizens say they want in their community.