- Living in Ozark
- Local Use Tax
Local Use Tax
Educational Voter Information
On April 3rd, 2018, Ozark voters will decide the following ballot issue regarding a USE TAX. This is the language you will see on the ballot
Official Ballot Language
Shall the City of Ozark, Missouri impose a local use tax at the same rate as the total local sales tax rate, currently 2.375%, 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? 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 in any calendar year.
[ ] Yes
[ ] No
If you are in favor of the question, mark the box opposite ‘YES’. If you are opposed to the question, mark the box opposite, ‘NO’.
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 types of items does the local use tax apply to?
A use tax is applied to the same types of items as the sales tax. The use tax does not expand the list of products which incur a sales tax. The use tax applies to out-of-state transactions that will be shipped to Missouri.
In February of 2017 Amazon volunteered to begin collecting the Missouri State use tax, in place since 1959, on purchases by Missouri residents. Ozark residents currently pay 4.225% to the state on purchases from Amazon. The state does not provide any of their revenue collected from online sales to the City of Ozark. Ozark may only collect 2.375% (equivalent to current sales tax rate approved by voters) from orders shipped to Ozark addresses IF voters approve the tax.
If you buy things from out-of-state vendors which do not have a nexus or ‘direct connection’ (such as a sales representative or store) in Missouri, you will not pay the use tax on those transactions. If you never buy anything from out-of-state which has to be shipped to Missouri, you will never pay any use tax.
What is a local use tax?
The local use tax is applied, in lieu of the local sales tax, on transactions that individuals and businesses conduct with out-of-state vendors, including catalog and direct market sales. The use tax will always be charged at the same rate as the local sales tax.
Why is this tax on the ballot now?
As mandated by the state, if not approved by the voters before November 2018, the EXISTING local sales tax collected for out-of-state vehicle sales will be eliminated. The City has collected a sales tax on vehicles, boats, and trailers purchased out-of-state for over 40 years.
According to the Department of Revenue the city will lose an estimated $300,000 in its annual budget. These revenues primarily support city services in the departments of public safety, public works and parks.
Why is this important to Ozark businesses?
The local use tax levels the playing field for local businesses who are required to charge and/or pay local sales tax.
Currently, by not charging the local use tax, out-of-state companies have an advantage over our local businesses. And, as online sales increase, local businesses and City budgets stand to see reduced revenues from this loophole.
I'm a business owner, how does this impact my business?
If you are an Ozark business who sells items through a catalogue or online store, the use tax does NOT mean you would have to begin collecting use tax on those sales. The use tax is only applied to purchases from out-of-state vendors (with a nexus in Missouri) if the item is shipped to Missouri.
The use tax is a way of applying our existing sales tax to those not currently required to pay it. The City would be able to collect a use tax on online, catalog or other direct sales from out-of-state businesses that also have a physical presence in the state (Walmart, Target, Amazon, etc.)
Do other Missouri cities have a local use tax? YES
Approximately half of all Missouri cities with populations of 2,000 or more already have a local use tax in place, including Springfield, Fremont Hills, Kimberling City, and Willard. The City of Nixa and Christian County are asking voters the same question on the April 3, 2018 ballot as well.
Do other cities have a local use tax?
What is the current Ozark Sales Tax?
When someone buys a product from a local Ozark business, they pay 8.35% total sales tax on their purchase. The sales tax is divided as follows:
4.225% State of Missouri
1.5 Christian County
0.25% County 911
2.375% City of Ozark
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