What is a Use Tax? Frequently Asked Questions

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One item that residents of Maryland Heights will be able to vote on in the upcoming November election is the proposition of a local use tax.

The purpose of a local use tax is to assess the same tax rate on out-of-state purchases as local purchases. For example, if a person purchases a piece of furniture at a store located here in Maryland Heights, the vendor collects a state and local sales tax on that item. However, if the same person purchased the same piece of furniture online from a vendor located outside the state of Missouri, the vendor is not required to collect the same local sales tax. Approximately half of all Missouri cities with populations of 2,000 or more already have a use tax in place.

We've compiled answers to frequently asked questions on this topic:

What is a local Use Tax?
A Use Tax is a tax on the purchase of goods by Missouri residents from out-of-state vendors. Products exempt from the sales tax would also be exempt from the Use Tax. 

I already pay Sales Tax. Is this the same thing?
Nope! Sales Tax applies to purchases made at local retailers within Missouri, while a Use Tax applies to purchases made from out-of-state. Purchases cannot fall into both groups and you cannot be taxed twice. 

What would be the rate of the Use Tax?
The local Use Tax rate would be the same rate as the local Sales Tax rate. If the local Sales Tax rate is reduced or raised by voter approval, the local Use Tax will also be reduced or raised by the same action. Currently, our Sales Tax rate is 8.24% and one of the lowest rates in the area compared to other cities.

How can a Use Tax benefit my community?
As online purchases increase, local revenues decrease. Funds generated from the Use Tax will be used to pay for vital municipal services that include: public safety, road and sidewalk repairs, parks and programming, emergency equipment and more. 

What if I do not shop online?
If you do not make any purchases online to an out-of-state vendor, the Use Tax will not affect you. You are already paying a Sales Tax when you purchase goods and services and cannot be taxed twice. 

If you have any questions about Use Tax, please contact us at MHLife@marylandheights.com or (314) 291-6550.