Taxing decision

For Camelia Bass, voting against St. Louis County’s proposed use tax came down to a simple concern: People are already struggling to make ends meet. 

“People don’t have it,” Bass said. “We just don’t have it — the community doesn’t have it.”

Bass was among the 65% of St. Louis County voters who rejected Proposition U in the Aug. 4 primary election. The measure, which would have applied the county’s existing sales tax rate to qualifying purchases from out-of-state vendors, received just 35% support.

It was the second time in four years county voters rejected a use tax, although the measure lost by a much narrower margin in 2022.

The tax was designed in part to address the growing shift toward online shopping. But for Bass and other consumers, the debate was also about what another tax collected at checkout would mean for household budgets.

Bass pointed to residents who may depend on online shopping because they do not have transportation to reach brick-and-mortar stores.

“Some people don’t have cars to go to the store, so that’s their only means of getting what it is that they need,” she said.

Prop U would have applied St. Louis County’s existing 3.513% sales tax rate to qualifying purchases from out-of-state vendors. Online retailers would have collected the tax from shoppers at checkout and sent it to the Missouri Department of Revenue. The use tax would not have been charged on purchases already subject to the corresponding county sales tax. 

On a qualifying $100 purchase, the county tax would have been about $3.51; on a $500 purchase, about $17.57.

Missouri already has a state use tax, and some municipalities in St. Louis County have their own voter-approved use taxes. Prop U would have established the county-level tax.

Supporters described Prop U as a way to put local retailers on more even footing with out-of-state online sellers.

Charlie Hinderliter, senior vice president of government affairs at St. Louis Realtors, said his organization supported Prop U both to help local businesses compete with large online retailers and to raise money for public services.

“For us, the reason we supported it is twofold,” Hinderliter said. “First, it puts local businesses on an even playing field as out-of-state, billion-dollar companies like Amazon. Second, it’s about services.”

Hinderliter said the county’s tax structure has not kept pace with changes in how people shop.

“Technology is always faster than the law,” he said.

North County resident Ketrice Skinner said she understands the concerns of local businesses but ultimately has to consider what she can afford.

“I prefer the price of tax to be much cheaper because you still gotta pay for delivery fees,” Skinner said. “And then when you go to the store, you gotta travel to go get it and you’re spending money, traveling, spending more money paying for taxes.”

St. Louis County officials expect a budget deficit of at least $50 million next year. County Executive Sam Page has warned that without additional dependable revenue, cuts could fall heavily on parks maintenance, road and street repairs and public safety, with nearly 100 police officers potentially losing their jobs.

“Without additional recurring revenue, we have about a year left before the NFL settlement funds run out and we will no longer be able to operate county government normally, without a significant source of revenue or painful budget cuts,” Page said the day after the election.

St. Louis County received about $169 million from the region’s $519 million Rams lawsuit settlement. At the time of the election, about $56.2 million had been allocated, leaving more than $100 million unassigned.

Prop U revenue would not have gone solely to the county. The measure included a mechanism to distribute some of the money to municipalities, with the revenue going into their general funds.

County officials estimated the measure would generate between $50 million and $100 million annually countywide.

County leaders could eventually ask voters to reconsider the use tax. Page has said the County Council could seek a voter-approved property tax increase, use more of the remaining Rams settlement money to support the budget or put a use tax before voters again.

Page said county leaders would have to do a better job explaining what the loss of additional revenue could mean for county services.

“We need to put resources into educating the voters on what service cuts mean to St. Louis County,” Page said. “If the council wants to see this pass, they should approve some money to help educate the voters on what it means to choose between cutting police officers or having an online sales tax like most jurisdictions in St. Louis County.”

Bass said voters may hear the word “tax” and think first about the money coming out of their own pockets rather than the services the revenue could fund.

“When people hear taxes, they are not thinking about our roads or our cities,” Bass said. “They are thinking about their pockets.”

Still, Bass said she understands the concern about what online shopping means for local businesses.

“I realized that there’s a lot of small businesses around, and I would much rather keep them,” she said. “If we start buying everything online, we’re gonna lose stores.”

St. Louis American reporter Sylvester Brown, Jr. contributed to this report.

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