St. Louis County Council Reintroduces Proposal for Online Sales Tax. The St. Louis County Council is reviving a proposal to implement a sales tax on out-of-state internet purchases, aiming to bolster the county’s finances in light of a projected $35 million budget deficit this year. The measure, which requires voter approval, was previously rejected in 2022, but some council members believe the time is ripe for a second attempt. Currently, local brick-and-mortar retailers are obligated to collect local sales taxes, whereas online retailers, such as Amazon, Wayfair, and Shein, are not.
Democratic Councilwoman Lisa Clancy from Maplewood advocates for this online sales tax, known as a use tax, to level the playing field for local businesses. Clancy initially introduced the concept back in December 2023 and has brought it back into discussion this month.
St. Louis County’s sales tax rate stands at 3.5%, with individual municipalities adding their own rates on top of that. Some municipalities have already adopted use taxes. In 2021, Missouri began allowing online sales taxes, becoming the last state to implement such measures after a pivotal U.S. Supreme Court decision in 2018 authorized the collection of these taxes. According to estimates from the Municipal League of Metro St. Louis, the county could generate $65 million or more annually from the proposed tax. This revenue would support the county’s general fund, which finances essential services such as police, road maintenance, and public health. Support for the incoming use tax from municipalities is strong, as they would benefit from a share of the county’s revenue, in accordance with state mandates.
Additionally, the proposal includes allocations for the St. Louis Zoo and public safety projects. The County Council has earmarked funds for regional parks and emergency communication services as part of the spending plan. Despite the potential benefits, gaining voter support could prove challenging. Many residents might perceive the use tax as a new tax rather than an extension of existing local sales taxes, which Pat Kelly, Director of the Municipal League, aims to clarify.
Local organizations, including St. Louis Realtors and Greater St. Louis Inc., have expressed their backing for the proposal and committed to advocating for its passage. To further educate voters, County Executive Sam Page has suggested allocating $500,000 for a public relations campaign focusing on the implications of the tax for county residents. Democratic Councilwoman Shalonda Webb of North County plans to propose a lower budget for this initiative during next week’s council meeting.
However, some council members, including Republican Councilman Dennis Hancock from Fenton, remain skeptical about the feasibility of a successful campaign within the few months leading up to the April 8 election. Hancock questioned the urgency of placing the measure on the ballot, suggesting that a more extensive educational effort could be beneficial. Kelly underscores the importance of informing voters about the use tax.
He believes that as the community learns more about the benefits and necessity of the tax—especially in light of declining revenues and the rise of internet sales—support will increase. Should voters reject the measure again, Kelly suggests swiftly reintroducing it for future ballots. In summary, the St. Louis County Council’s proposal to tax online purchases reflects a broader trend toward adapting local tax policy to the realities of online commerce. With both challenges and opportunities ahead, the upcoming months will be crucial in shaping the future of this initiative.
