The city of Herculaneum is licking its wounds after an overwhelming defeat of its proposed use tax on internet sales.
Proposition U would have allowed the city to charge residents its 3.5-cent sales tax on internet purchases, which is equal to the tax customers are already paying brick-and-mortar businesses.
Herculaneum city officials hoped to entice voters into passing the measure by partnering the addition of a use tax with a reduction in the real estate and personal property taxes the city collects from residents by 10 percent.
Herculaneum residents weren’t interested in the deal. Prop U failed by a margin of 123 “yes” votes, or 26.45 percent, to 342 “no” votes, or 73.55 percent.
Herculaneum City Administrator Logan Jaskiewicz said the city was disappointed by the outcome but respects the will of the voters.
“Measures like this can be challenging, especially when they include the word ‘tax,’ even though a use tax is designed to level the playing field rather than create a new burden,” Jaskiewicz said.
Jaskiewicz said city officials believe a portion of the outcome is likely due to understanding.
“Use taxes can be confusing, and despite our efforts, it’s possible not everyone fully understood that this would not have resulted in both a sales tax and use tax being applied to the same transaction and that it was intended to capture revenue already being collected by the state but not currently shared with the city,” he said.
The overall sales tax rate in Herculaneum is 9.85 cents per $1 spent. Of that, 4.225 cents goes to the state, 3.5 cents to the city, 1.625 cents to Jefferson County and 1/2 cent to the Joachim-Plattin Ambulance District.
Currently, when Herculaneum residents buy items online, they are charged state taxes, but they do not include the 3.5 percent city tax.
Jaskiewicz said moving forward, city officials believe additional public education and clearer communication about exactly where the revenue would go, such as supporting police, fire and parks, while also offsetting property taxes, would be beneficial. He said the city does not have any immediate plans to place the use tax back on the ballot.
“It is something that could be revisited down the road once we’ve had more time to engage with residents, provide clearer information, and ensure the community fully understands the purpose and benefits before asking them to consider it again,” he said.
While most cities in Jefferson County have previously asked voters to pass the use tax, so far only Kimmswick, Crystal City and Byrnes Mill have voted in favor of the increase.