Byrnes Mill voters will be asked on April 4 to approve a use tax that would allow the city to collect sales tax on internet purchases.
If passed, the use tax would allow the city to collect its 2.5 percent sales tax on internet purchases, just as it does at retail businesses in the city.
The measure requires a simple majority for approval.
Byrnes Mill City Administrator Adam Thompson said at least some of the revenue from the use tax would be used to fund “the buy-in” to join the Missouri LAGERS pension system, which would benefit all the city’s approximately 20 full-time employees.
“It (use tax revenue) would go toward funding the initial cost of the retirement plan,” he said. “It would be a new plan to take effect and the city funds the upfront cost. After that, the funds will go to what the (Byrnes Mill Board of Alderpersons) decides to do with it.”
On Jan. 4, the board voted 4-0 to place the measure on the April ballot. Glenn LaVenture and Mary Scheble were absent from the meeting.
Thompson said the city recently became eligible to join the LAGERS program, and the board still needs to vote to officially join.
He said the program would be a big improvement over the current retirement plan in place for city employees, adding that joining the LAGERS program would help the city recruit and retain employees.
Thompson said having revenue from the use tax would make it much easier for the city to join the LAGERS program.
“It’s important for Byrnes Mill because that money is going to help offset the cost of the retirement plan,” he said.
Thompson said there are other reasons it’s important for the city to have the use tax in place.
“It will really help the brick-and-mortar places here that are competing with Amazon,” he said. “Right now, if you go buy things online, there’s no tax for anybody. That makes it harder for the brick-and-mortar stores. This will help alleviate the pressure on brick-and-mortar stores competing with online sales.”
The use tax, or internet sales tax, is commonly referred to as the “Wayfair” tax, a term that originates from a 2018 U.S. Supreme Court case, South Dakota vs. Wayfair Inc., that overturned a ruling preventing states from taxing vendors who don’t have a physical presence in that state.
Missouri residents already are obligated to pay state sales taxes on internet sales, but not all vendors collect it. Missouri residents who buy more than $2,000 in untaxed goods and services are supposed to report that on their state income tax returns.
In addition, a Missouri state law went into effect this month requiring businesses out of state to pay Missouri sales taxes only if they had more than $100,000 in revenue during the previous calendar year. However, this new law applies only to state sales tax. Counties, cities and other entities that collect sales taxes must ask their voters to approve a use tax equal to their sales tax rates on internet purchases and other out-of-state sales.
Byrnes Mill, like other cities in Jefferson County, as well as the county itself, previously placed the issue on the ballot, and it has failed in most jurisdictions. Currently, Kimmswick and Crystal City are the only two cities in Jefferson County that won approval from voters to charge their sales tax on online purchases.
“It was close to passing one time before,” Thompson said of the city’s attempts. “It did fail, but (city officials) have a good feeling it will pass this time.”
In April 2022, Byrnes Mill’s attempt to pass the use tax failed with 231 no votes (55.66 percent) to 184 yes votes (44.34 percent).
That was a better showing than a previous attempt in August 2018, when the issue was defeated with 526 votes against (63.15 percent) to 307 favorable votes (36.85 percent) in Byrnes Mill.