When Cottleville, as well as St. Peters, O'Fallon, St. Charles, and Weldon Spring  voters go to the polls on August 7th, they will have the opportunity to vote on Proposition U, which would impose a Use Tax primarily on the purchase of goods by Cottleville businesses from out of state vendors.

        What is a Use Tax?     
In the simplest terms, a Use Tax is a Sales Tax on the purchase of goods by Missouri businesses from out-of-state vendors. The amount of Use Tax due on a purchase is equal to the Sales Tax rate in place at the point of delivery. That means that when an out-of-state purchase is made and no Sales Tax is charged, the Use Tax would be applied; therefore, the same amount of tax is applied on both in-state and out-of-state purchases.

         Are Use Taxes Common?
More than 105 Missouri cities and 45 States already have a Use Tax, including the State of Missouri, St. Charles County, Wentzville and Foristell. Cottleville currently does not have one. Without a Cottleville Use Tax in place, out-of-state purchases do not get charged the 2% City of Cottleville Sales Tax that is charged on local purchases. With a Use Tax in place, the same amount of Sales Tax applied on local purchases by businesses would apply to out-of-state purchases.  

Because the Use Tax rate mirrors the Sales Tax rate, the Use Tax will always be equal to the Sales Tax rate. That means with a Use Tax in place, a business buying out of state will pay the same rate charged on products purchased locally on which they would be paying Sales Tax. If the business buys locally, the Sales Tax applies. If the out-of-state purchase does not have sales tax applied, then the Use Tax applies, so there is not a double tax.                                                                
         How will the Use Tax be Used?

According to the Missouri Municipal League, passage of Proposition U could bring an estimated $65,000 to the City of Cottleville. The City Board of Aldermen has determined that additional revenues from Proposition U will go towards items such as street improvements and public safety.  This additional revenue will keep our roads and sidewalks in the condition our residents expect.

Is this only a business tax?
The Use Tax is primarily a business tax, but there are cases where it may apply to individuals. As a resident of Missouri, you are already responsible for reporting out-of-state purchases totaling more than $2,000 (NOT  including personal property such as vehicles, boats, etc.) and paying those as part of your State of Missouri tax submissions due on April 15th each year.  That revenue goes to the State and St. Charles County through their Use Tax that is already in place. In the case with business purchases, the City of Cottleville does not receive the 2% of taxes that would apply if Sales Tax had been applied. Passage of Proposition U would mean the City of Cottleville would also collect the City's portion of the Use Tax, which will equal the City Sales Tax rate, currently 2%.

**This document was prepared and paid for by the City of Cottleville, 5490 Fifth Street, Cottleville MO 63304 solely to educate and inform residents about questions that may be presented at the polls. It is NOT intended to advocate, support or oppose the passage or defeat of any measure or candidate. Each voter should vote based on his or her own best judgment.