Combined receipts coming in higher than 2019 thus far
Despite the COVID-19 pandemic and some ordered shutdowns earlier in the year, sales tax and use tax collections in Platte County are actually showing a one percent increase compared to this time last year, according to numbers announced this week by Rob Willard, county treasurer.
“The use tax bull market continues,” Willard said Tuesday.
While collections of the county general sales tax have fallen by nearly 10 percent compared to this point in 2019, the tremendous growth in use tax is covering the overall sales/use tax picture thus far.
Willard said that, in fact, county commissioners had budgeted for a two percent drop in combined sales/tax collections in 2020.
That one percent growth in combined sales/use tax revenue can be attributed to the large gain in use tax receipts for Platte County. Through the September payment received from the state, Platte County’s use tax collections are up nearly 23% compared to this time last year.
Use taxes are generally applied to online purchases.
Under its current structure, the county deposits all general sales tax money and use tax dollars into its general fund.
“I believe an increase in online purchases along with enhanced collection efforts by the Missouri Department of Revenue have contributed to a dramatic increase in use tax receipts,” Willard told The Landmark recently. “I can’t say if this is going to be a permanent trend or a reflection of 2020.”
The use tax is a confusing animal to a lot of folks, both among the public and even to some in public office.
“Many online retailers report the taxes they collect as use taxes. If a purchase is made online, and that company doesn’t have a physical location (a nexus) in Missouri, the taxes collected are reported as use taxes,” Willard said.
“The Supreme Court handed down a decision in 2018 involving the website Wayfair in which states were allowed to collect sales taxes for online purchases even if the online retailer didn’t have a physical store, warehouse, etc. to the state. This decision reversed a decades old ruling that out-of-state vendors were not required to collect the sales taxes for out-of-state customers,” Willard added.
“Additionally there appears to be an enhanced reporting and collection effort on the part of the Missouri Department of Revenue,” Willard said.
It’s important to note that even prior to COVID-19 slowdowns, the county’s general sales tax had seen a decline. In the first quarter of 2020, county general sales tax collections were already down by six percent compared to the first quarter of 2019. The receipts through March reflected consumer activity for the months of November 2019, December 2019 and January 2020.
Since the six percent drop in the first quarter, the general sales tax collections have fallen by an additional 3.6 percent after the effects of COVID-19 and shutdowns.
Thus far, the county has collected $11.1 million in combined general sales tax and use tax dollars. About $6.7 million of that is general sales tax and $4.4 million is use tax.