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Proposition Action: Use Tax

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1. What is the Use Tax listed as “City of Joplin Proposition Action” on the November 2, 2021 ballot?

A local use tax is a tax that applies to purchases made from out-of-state vendors and shipped to a location in Joplin. It is applied to the same type of products subject to traditional sales tax. The difference is where the goods are purchased and shipped. If you purchase an item at a retail store in Joplin, you pay city sales tax. On the other hand, if you purchase an item through the internet or by catalog from an out-of-state business and have the item shipped to Joplin, then the use tax may apply. You would never pay both. It’s one or the other, depending on where the goods are purchased.

2. Will the Use Tax apply if I buy something from a Missouri retailer?

No. The use tax does not apply to purchases made by Missouri residents from a Missouri retailer. The use tax applies only to purchases from out-of-state vendors.

3. Will the Use Tax apply to every purchase made from out-of-state vendors?

Yes, if the goods purchased are being shipped to you in Joplin and would be subject to a sales tax if purchased at retail, then they may be subject to the use tax. On June 21, 2018, the U.S. Supreme Court ruled in the South Dakota vs. Wayfair case overturning the previous ruling that exempted out-of-state vendors without a physical presence in the state from collecting the use tax. This significant ruling means online retailers may now be required to collect and remit any applicable sales and use taxes. However, municipalities must have a use tax in place to capture the revenue from this decision. If you physically purchase something from a retailer in another city such as Bentonville, AR or Miami, OK, the use tax would not apply because you would have paid the sales tax of the community you are located at the time of purchase. 

4. Why does Joplin need a Use Tax?

It provides an important source of local funding and would allow for the physical infrastructure and public service personnel needs that are required to do the work identified by the community during the City Manager’s Listening Tour and Council Visioning Workshop that aim to address challenges identified in the community. The use tax would also level the playing field for local businesses. Otherwise, these local businesses are at an unfair competitive disadvantage to out-of-state businesses when local taxes are avoided. 

With no local use tax in place, residents have an incentive to make out-of-state purchases instead of buying locally. This impacts local jobs and sends more than a million dollars out of our economy each year, affecting economic development, which has been identified as a community need by resident responses through the Listening Tour. While the exact amount of this resource is unknown, it is estimated this revenue source will generate between $3 and $4 million annually in Joplin.

5. Will the Use Tax have other local benefits?

• It helps retain local businesses, in turn keeping local jobs in the area.
• Local use tax replaces the local sales tax that is not collected on out-of-state purchases.
• Helps to ensure the city has the resources needed to address city-wide beautification, neighborhood blight, homelessness, and decrease crime and increase safety.

6. Doesn’t Amazon already collect this use tax?

Amazon.com volunteered in February 2017 to begin collecting and remitting use tax in Missouri for cities that have a use tax already in place. Joplin does not currently capture this revenue from Amazon and other online retailers, since there is no approved use tax currently in place. 

7. What is the rate of the Use Tax?

The local use tax rate must mirror the local Sales Tax rate, currently 3.125%. If the local sales tax rate decreases or increases by voter approval, the local Use tax also changes by the same action so the sales tax rate always matches the use tax rate.  

8. I don’t buy anything online. How will it affect me?

If you never buy goods from out-of-state vendors which have to be shipped to you in Joplin, you won’t pay any use tax. However, if the City of Joplin does not have a use tax in place, it will not receive any tax revenues from those who do purchase items on line, causing the City to experience an erosion of sales tax revenues.

9. When are the polls open?

Polls open at 6 a.m. and close at 7 p.m.

10. I already pay Sales Tax on purchases, is this the same thing?

No. A sales tax is imposed based on the location of the seller, while a use tax applies to purchases made from out-of-state vendors and shipped to Joplin for use. 

When purchases are made at retail stores in Missouri, sales tax is collected at that location. On the other hand, purchases from out-of-state vendors that are shipped to Joplin are subject to a use tax.  A purchaser pays either the sales tax or the use tax, but never both.  

Example of In-State Purchase:

Purchased Item Cost                           $200.00
Joplin Sales Tax (3.125%)                         6.25
TOTAL                                                 $206.25

Example of Purchase from Out-of-State Vendor without use tax in place:

Purchased Item Cost                          $200.00
Joplin Use Tax (3.125%)                     ___0.00
TOTAL                                                 $200.00

Example of Purchase from Out-of-State Vendor with use tax in place:

Purchased Item Cost                         $200.00
Joplin Use Tax (3.125%)                          6.25
TOTAL                                                $206.25

11. How much will the City of Joplin receive from a local Use Tax?

While the exact amount of this resource is unknown, it is estimated this revenue source will generate between $3 and $4 million annually in Joplin based on the current local rate of 3.125%. 

12. How would the Use Tax revenues be spent in the City’s Budget?

The use tax would mirror the rate of the current sales tax in place. The percentage breakdown of the existing local sales tax totaling 3.125% is listed below, along with a dollar amount of the estimated revenue that would be generated by this source:

Sales Tax                                                                        Percentage:          Dollar Amount of $3 Million

1. General Sales Tax .......... ……………………………… 1%  ……………….$960,000
2. General Sales Tax for Public Safety Purposes ……....½% ……………….$480,000
3. General Sales Tax for Pension Plan……………………½% ……………….$480,000
4. Transportation................ ………………………………..½% ……………….$480,000
5. Capital Improvements.... ………………………………3/8% ……………….$360,000
6. Parks/Stormwater.......... …………………………..…....¼%........................$240,000 

13. How will the Use Tax revenues be used?

The Use Tax will be collected at the same rate as the current Sales Tax (3.125 percent). Revenues collected from the Use Tax will be used to improve the community by meeting the City Council goals through the 2021 Action Plans.  The goals include initiatives to address community issues such as 

• improve community appearance, 
• address neighborhood blight, 
• address homelessness, 
• reduce crime and increase safety, 
• enhance economic development and other priority goal areas identified by citizens in the City Manager's Listening Tour survey.

14. What happens if the Proposition Action fails?

Local businesses will remain at a competitive disadvantage to out-of-state vendors. In addition, By not having a use tax in place for purchases from out-of-state vendors, including online purchases, the City of Joplin will experience an erosion of sales tax revenues.

15. When do I vote on this issue?

Election Day is November 2, 2021. Polls will be open from 6 a.m. to 7 p.m.

16. How does the ballot question read?

City of Joplin - PROPOSITION ACTION

In an attempt to eliminate the un-fair advantage enjoyed by out-of-state vendors over local vendors, shall the City of Joplin impose a local use tax at the same rate as the total local sales tax rate, currently three and one-eighth percent (3^1/8%), provided that if any local sales tax is repealed, reduced, or raised by voter approval, the local use tax rate shall also be repealed, reduced, or raised by the same action? A use tax return shall not be required to be filed by persons whose purchases from out-of-state vendors do not in total exceed two thousand dollars ($2,000.00) in any calendar year.

If you support this question, then you vote “YES”.

If you do not support this question, you then vote “NO”.

17. How do I vote Absentee for the November 2, 2021 election?

Please contact your local election office regarding the specific guidelines to vote absentee in a Missouri election. 

For residents living in Jasper County, contact: 

Jasper County Clerk's Office
 601 S. Pearl, Room 200
Joplin, MO 64801
417-625-4307
Website: http://www.jaspercounty.org/election.html

For residents living in Newton County, contact: 

Newton County Clerk's Office
101 S. Wood St.
Neosho, MO 64850
417-451-8221
Website: http://www.newtoncountymo.com/county-clerk.html

Missouri law requires that requests for absentee ballots must be received by 5:00 p.m. on the second Wednesday prior to Election Day if the ballot is mailed. The deadline for absentee voting in person in the office of the election authority is 5:00 p.m. on the day before the election.