What is a Local Use Tax?
Same as a Local Sales Tax
but applied to goods purchased from out-of-state vendors including motor vehicles, trailers, boats, and any item under Missouri Law requiring licensing and titling.
There are two reasons the City of Ozark has placed a Local Use Tax on the ballot
1.
Continue collecting the existing Local Sales Tax on Motorized Vehicles
– Currently, the City of Ozark collects its local sales tax of 2.375% when an Ozark resident registers and titles a motorized vehicle, boat, trailer, etc. that they have purchased from an out-of-state vendor. The City of Ozark has relied on this revenue for over 50-years, which is primarily used to pay for police, streets, and park services from the city's general fund.
Amendments to the State law due to a Missouri Supreme Court decision, requires
all cities to get voter approval to continue collecting this local sales tax before November 2018. If the voters do not support the continuation of this sales tax on motorized vehicles, the Missouri Department of Revenue estimates that the City of Ozark will lose approximately $300,000 annually in its General Fund. Again, the departments most affected by the loss of this revenue would be Police, Streets, and Parks.
2.
Begin collecting a local sales tax (2.375%) on out of state sales from vendors having a “Nexus” in Missouri
– Currently, the City of Ozark is not authorized to collect a sales tax on purchases made by Ozark residents from out
-
of
-
state vendors. Sales tax revenue is the city's largest revenue source in the general fund, and is primarily used to pay for police, street, and park services. In order for the City of Ozark to
collect a tax similar to a local sales tax on out-of-state purchases, Ozark voters must approve what is called a "local use tax." The Missouri Department of Revenue estimates that a “local use tax” for out-of-state purchases will generate an approximate $120,000 in new revenue for the City of Ozark. This new local use tax revenue will still be used to pay for police, street, and park expenses.
So, if Ozark voters pass a local Use Tax When Does it apply to me and when does it not?
Ozark resident buys a goods a retail shop in Springfield
You will pay Springfield Sales Tax
Ozark resident buys goods over the internet from Springfield store and is shipped to Ozark
You will pay Springfield Sales Tax
Ozark resident travels to Harrison Arkansas buys furniture and takes possession in Arkansas
Pay Sales Tax in Harrison, Arkansas
Ozark resident buys a Motor Vehicle in Harrison Arkansas and lives in Ozark
Pay the Ozark Tax you currently pay
Ozark resident buys goods over internet from out-of-state vendor with nexus in Missouri (product is shipped to Ozark)
You will pay Ozark Use Tax (2.375%)
Ozark resident buys goods over the internet from out-of-state vendor with NO nexus in Missouri
Use Tax does NOT apply
Ozark business owner
who purchases items from out-of-state vendor for resale
Use Tax does NOT apply
What is the current Ozark sales tax? When anyone buys something from a Ozark business, they pay 8.375 % total sales tax on their purchase. This sales tax is divided as follows:
4.225% to the State of Missouri
1.5% to Christian County
.25% to County 911
2.375% to the City of Ozark
How much annual revenue does Ozark expect to lose if sales tax on out-of-state vehicles purchases does not continue?
$300,000 currently collected on vehicle sales tax revenue which is equivalent to:
Six (6) Police Officers (includes: salaries, benefits and training),
OR 1.03 miles of new trails,
OR 2.4 miles of asphalt overlay on city streets
How much annual revenue does the city expect to generate from the local use tax?
An estimated $120,000 in new revenue which is equivalent to:
Three (3) police cars,
OR 6,000 feet of sidewalk,
OR the entire park maintenance budget (salaries, services,
equipment,mowing, & supplies)
What other cities have approved the use tax?
Springfield, Fremont Hills, Aurora, Willard, Mt. Vernon and over 130 other Missouri cities have already passed a use tax requiring out-of-state vendors, such as catalog sales and online stores, to collect a use tax at the same tax rate as their local sales tax.
Other Quick Key Points to Know about the Proposed Local Use Tax
- Missouri municipalities have been collecting Motor Vehicle Sales Tax for over 50-years. This is not a new tax.
- Local Use Tax rate is required to be the same rate as the local sales tax (2.375%)
- You are NEVER charged both a Use Tax and a Sales Tax- It is either one or the other or neither
- Local Use tax does NOT apply to purchases made from a Missouri retailer
- Does NOT apply to online purchases if vendor does NOT have a Nexus in Missouri
For more information on the proposed Local Use Tax on the April 3rd, 2018 ballot please visit our website:
HERE
Click
HERE
to watch informational presentation on proposed Local Use Tax
Other Questions?
Please contact Samantha Payne, Public Information Officer, City of Ozark
This educational information has been
PAID FOR BY:
CITY OF OZARK
Rick Gardner, Mayor
PO BOX 295
Ozark, MO 65721
