Voters Decide - Use Tax (11/2/21)
Posted on 09/16/2021

A “Use Tax” is often called an “Internet Tax”Use Tax graphic

  • It is a local tax on goods purchased from out of state (most often online) for delivery to and use in Cape Girardeau.
  • You will never pay a use tax and a sales tax on the same purchase.
  • The State of Missouri mandates the local use tax be applied at the same rate as the city’s sales tax, currently 2.75%.

Through Election Day November 2, voters will decide whether to keep important services funded by just paying the same amount of tax whether shopping online or off.

  • In recent years internet sales have risen from 5% of all retail to over 15% and trending up.
  • As more and more retail activity moves online, it is vital for local communities to modernize tax mechanisms to better reflect these new realities.
  • As in-store purchases decrease, this will put more and more stress on the city’s ability to deliver quality services
  • Currently, no city sales tax is being collected and paid by internet retailers.
  • The result: Significantly less revenue to operate our city (at a time when costs for staff and materials are going up)
For the past 100 years, cities like Cape Girardeau have relied largely on sales tax for operations – and used dedicated initiatives for capital improvements. The city cannot attract good people with low entry-level pay, nor can we retain good employees on stagnant wages. Directly impacted services include:
  • Police & Fire
  • Street Maintenance
  • Pothole patching, snow removal, signal maintenance, etc.
  • Parks & Recreation Services & Maintenance
  • Cemetery Maintenance
  • Planning/Inspections/Engineering
  • Code Enforcement
Use Tax Examples

The City does not receive sales tax or use tax revenue from state or county. You will never pay both a use tax and a sales tax on the same transaction.
.

Frequently Asked Questions

What is the difference between a use tax and a city sales tax?  A local sales tax is collected by “brick and mortar” retail stores in the City of Cape Girardeau. The local use tax is applied to purchases made from out of state vendors that ship goods to Cape Girardeau customers. These out of state and online businesses do not currently collect local sales tax. Any tax amounts currently added to online purchases are for the State of Missouri statewide use tax and/or the County use tax, neither of which the City receives any part.

What is Use Tax Fails? Fees for services will increase. The City will continue to lose employees to higher paying jobs and services will suffer. Services supported by the general fund will be reduced or eliminated.

How is the tax collected? Businesses collect use or sales tax at the point of sale, send it to the Missouri Department of Revenue (DOR), and then the DOR sends it to the cities.

Can we redirect money from other tax initiatives?
No. Voter-approved and dedicated funds from other taxes such as the Parks, Recreation and Stormwater sales tax, Transportation Trust Fund, and others can only be used for those initiatives. The Use Tax is restricted to the general fund which provides essential services and support.

Does the city receive money from the voter-approved county public safety tax?
No, that too is a dedicated fund for the County Sheriff’s Office and does not serve as a revenue source for the City of Cape Girardeau Police Department.

Who can I talk to with my questions?
Call, email, or send a message to staff or Council anytime. Call the City Manager's Office at 573-339-6320 or contact Council.

 

Comparison of City Sales Tax and Inflation
2016-2019
During this same period, Cape LOST: Sears Grand, Toys"R"Us, Payless Shoes, Hancock Fabrics, Kmart, and Macy's
Tax Graph
An essential initiative, as currently there is diminishing general fund revenue from sales tax due to online leakage.

*Election is Nov. 2*
Absentee and In-Person Voting Now Available
BALLOT LANGUAGE - Shall the City of Cape Girardeau impose a local use tax at the same rate as the total local sales tax rate, provided that if the local sales tax rate is reduced or raised by voter approval, the local use tax rate shall also be reduced or raised by the same action?