Online Use Tax: What You Need to Know



Belton, like many cities across the United States, is grappling with the implications of the Wayfair decision by the U.S. Supreme Court in 2018. This decision granted governments the authority to collect taxes on online purchases, known as an online use tax, equivalent to the sales tax for local, in-person transactions. In this article, we'll break down the key points and shed light on why Belton is considering placing the online use tax on the ballot during the April 2024 municipal election.


Understanding Online Use Tax


An online use tax serves as city sales tax for online purchases from out-of-state retailers. It ensures that whether you buy a product from a local store or an online retailer, the city sales tax amount remains the same, contributing to city government revenues. Watch the video below for a full explanation on what an online use tax is.



Online Use Tax in Missouri


Each state has the flexibility to establish its mechanism for collecting the online use tax. In Kansas, the online use tax automatically mirrors the sales tax, applying uniformly to both in-person and online transactions. However, in Missouri, the state legislature decided that only the state portion of the online use tax would align with the sales tax rate, allowing local voters to decide whether to implement an online use tax for local city governments.




Missouri's approach led to unintended consequences. Online purchases from out-of-state retailers became more affordable without discounting goods, putting local businesses at a disadvantage.


Moreover, local governments couldn't collect revenues from online purchases, even as they continued to accept the responsibility of the strain put on roads and local infrastructure caused by delivery trucks from outside the community. The online use tax would help level the playing field for local businesses in Belton and remove the unfair advantage given to large, corporate, out-of-state vendors.


How Will the Money Be Used?



MORE, And Better, Sidewalks


If an online use tax were to be implemented, Belton would be opening doors to address a crucial concern for its residents. With 50% of the revenue collected earmarked for major sidewalk rejuvenation and construction projects, the city is poised to make substantial improvements to its pedestrian infrastructure. Sidewalks have long been a priority for Belton voters, and the decision to allocate a portion of the online use tax revenue to this cause demonstrates a proactive approach to addressing community needs. This initiative not only focuses on maintaining existing sidewalks but also the construction of new ones, aligning with the community's vision for safer, more accessible public spaces in Belton.




LESS Expensive Water Bills


If an online use tax were to be implemented, Belton will be able to substantially bring down the resident's water bills. At the end of the year, a rebate (estimated at $144 per water customer) will be distributed, addressing the concerns raised by many residents regarding the challenges associated with high water bills. This strategic use of the online use tax demonstrates the city's commitment to providing tangible benefits to the community, alleviating financial burdens, and ensuring a more affordable living experience for its residents.


Belton's decision to place the online use tax on the April 2024 ballot is an effort to address the challenges posed by online sales and ensure a fair and equitable taxation system. The proposed online use tax could significantly impact the city's revenue stream, providing financial relief to residents and supporting vital infrastructure projects. The upcoming municipal election will determine whether Belton embraces this taxation alternative to secure its financial future.


Frequently Asked Questions


What is an online use tax?

An online use tax serves as sales tax for online purchases from out-of-state retailers. It ensures that whether you buy a product from a local store or an online retailer, the tax amount remains the same, contributing to state and local government revenues.

Is this in addition to the regular sales tax I already pay?

No. You will only pay the online use tax when buying from an out-of-state online retailer (Amazon, Wayfair, etc.) who does not charge local, city sales tax.

Is this common for cities in Missouri?

Yes. As of 2021, 232 cities in Missouri have voted to enact an online use tax to help their community and local businesses.

Will I need to pay a different rate for online use tax if the local sales tax is lowered or changed?

No. The bill is written so that the online use tax will always be the same as the local sales tax rate.

Will this money just go into the general fund?

No. The money earned from this tax will help fund specific projects. Half the money will go towards improving and adding sidewalks to Belton. The other half of the money will go towards lowering water bills, an estimated $140-$180 per year!

Does this apply to buying a car via an online retailer?

No. However, you already need to pay sales tax on any vehicle purchased when registering with the DMV. Even on vehicles bought out-of-state or via an online retailer.

When will this be voted on?

This question will be present on the April 2024 election ballot. Make sure you are registered to vote, your voice matters!