Byrnes Mill residents turned thumbs-down to the city’s latest attempt to get a use tax passed. If approved, the measure would have allowed the city to charge its current 2.5 percent sales tax on internet purchases, just like the tax is charged at brick-and-mortar businesses.
The use tax failed with 202 no votes (54.3 percent) to 170 yes votes (45.7 percent).
Byrnes Mill tried unsuccessfully for the same use tax in 2018 and 2022.
City Administrator Adam Thompson said he was disappointed by the defeat.
“I think the biggest point was that people may not have understood it and where the revenue was going to,” he said.
Thompson said with a use tax like this you never know how much the city will bring in, but the plan was to use the revenue to fund a formal retirement program for Byrnes Mill city employees.
“We were going to use it to help pay for the initial buy-in for the LAGERS program, not paying for the program all the way through, which may have been part of the citizens’ confusion when they voted,” Thompson said.
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.
A Missouri state law went into effect in January 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, that 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 to receive that revenue.
Thompson said he believes the city will try again to get the use tax passed.
“I think we will try again next year because everyone still pays these online taxes. They just go to the state but not the city. So having some of that come to Byrnes Mill would be a good thing.”
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 have received approval from voters to charge their sales tax on online purchases.