Phelps County Voters Send Mixed Signals On Sales Taxes For Online Purchases | St. Louis Public Radio

Phelps County Voters Send Mixed Signals On Sales Taxes For Online Purchases

Nov 5, 2019

ROLLA — Voters in Phelps County were inconsistent Tuesday in their approach to authorizing local government to collect sales taxes on online purchases. 

A campaign to start collecting a use tax in cities of Rolla and St. James was successful but failed elsewhere in Phelps County.
Credit File photo | Jonathan Ahl | St. Louis Public Radio

Phelps County rejected the tax, while its two biggest cities, Rolla and St. James, approved it.

That means residents in Rolla will pay 2.25%, called a use tax, when making purchases online, and St. James residents will pay 2.0%. An additional countywide tax of 1.125% was not approved. 

Each municipality can use the revenue any way they want. Rolla, however, had publicly committed to using the increased revenue to fund the police and fire departments.

In Rolla, 56% of voters cast ballots in favor of the tax, with 44% opposed. Voter turnout was 15%.

“When you go to the voters and to the taxpayers, you don’t just want to tell a story,” said Rolla Mayor Lou Magdits. “It was critically important for us to make a tangible case on why we needed the revenue.”

State officials project Rolla will see about $250,000 in new revenue annually from the use tax. But Rolla leaders say their projections are between $400,000 and $600,000.

“Either way, we have to wait until the money starts coming in before the council can spend it,” said Rolla City Administrator John Butz. “The top two priorities will be increasing the pay of police and firefighters and replacing communications radios that are on the verge of becoming obsolete.”

The starting wage for those jobs in Rolla is about $10,000 less than in other communities within 50 miles.

In St. James, the use tax passed 53% to 47%. The county use tax failed, with 57% rejecting the referendum, fueled by overwhelming levels of "no" votes among county voters outside Rolla and St. James.

Rolla, St. James and Phelps County all report local sales tax revenues have not grown, in large part because of consumers continuing to shift more purchases to online merchants.

Opponents of the measure said that their taxes are already too high and that local government should look for cost-saving measures.

More than 260 Missouri cities and counties collect the use tax, which varies by municipality.

NOTE: An earlier version of this story incorrectly listed the amount of the St. James tax.

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