On Tuesday, June 2, Platte City voters have the opportunity to vote on a local use tax. Approving the City use tax does not increase the sales tax rate, it does extend the current tax rate to apply to out of state and on-line retail purchases delivered to Platte City addresses.
Although this is a difficult time to consider adjusting the City’s sales and use tax structure, the events of the past two months have shown the importance of adjusting the city sales and use tax structure to respond to the rapid growth of online and out of state retail sales. This ballot measure creates a level playing field for local merchants and provides funds for basic city services. This ballot measure was endorsed by the Platte City Area Chamber of Commerce Board of Directors.
The use tax is a fair way to ensure out-of-state retail merchants doing business in Platte City pay the same tax as local bricks and mortar retail businesses. If approved, out-of-state retailers will collect and pay the same tax as local retail merchants on items delivered to Platte City addresses.
The local use tax is the same rate as the current sales tax and is subject to the existing sunset provisions. Any purchase that is currently sales tax exempt is also exempt from the use tax.
Platte City residents are already paying a state use tax and a county use tax on out-of-state purchases delivered to their homes. However, Platte City residents do not directly benefit from the state/county use taxes we are already paying. Approving the city use tax provides funding to directly benefit local residents and which can only be used for Platte City’s basic services, including police, streets maintenance, parks and capital projects.
Approving the local use tax adjusts the city’s long term funding to the changes in retail sales driven by the rapid increase in e-commerce and on-line retail sales by out-of-state businesses. Out-of-state businesses not subject to the local use tax places local retailers at a competitive disadvantage and creates a loss in Platte City’s sales tax revenue, but does not reduce the need to maintain streets for delivery trucks and to provide police patrols to protect parcels left on front porches.
Platte City has been a good steward of public funds and is currently providing basic services, including police, streets, parks and capital projects with less general fund revenue than it collected in either 2015 or 2016. Over the past five years, the city has taken numerous actions to be more cost effective including reducing management positions, consolidating the municipal court, paying down debt, and refinancing debt at lower interest rates. While the city has maintained high quality services in spite of declining general revenue, it is becoming increasingly difficult to maintain or improve basic city services without voter action to adjust City revenue to the changing e-commerce economy. The City estimates that the use tax would initially generate approximately $100,000 for police and streets; $35,000 for parks and $35,000 for capital projects each year.
The following is the ballot language of the proposal:
“Shall the City of Platte City impose a local use tax at the same rate as the total local sales tax rate, currently 2.375 %, to fund police, street maintenance, parks and capital improvement functions, providing that if the local sales tax is reduced or raised by voter approval, the local use tax 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. ”
A “yes” vote will be in favor of a use tax and a “no” vote will be in opposition to a use tax. The City of Platte City has posted additional information on its website at www.plattecity.org.
Feel free to contact City Hall at (816) 858-3046 with any questions. Place your vote on June 2nd.