Dardenne Prairie will join other area municipalities in April in asking voters if they can continue to collect city sales taxes on motor vehicles purchased outside of Missouri.
Because of a 2012 Missouri Supreme Court ruling, the ability of cities to collect sales tax on out of state vehicle purchases will expire at the end of 2016 unless their voters approve a ballot measure allowing them to keep the measure on the books.
The Dardenne Prairie Board of Aldermen has approved placing a measure to continue the sales tax collection on the April 5, 2016 ballot. Lake Saint Louis, St. Peters and O’Fallon have taken similar actions on similar ballot measures. The measures ask voters in each city to authorize the continued collection of the local sales tax on motor vehicles, boats, trailers and outboard motors.
Dardenne Prairie collects about $250,000 a year in local sales tax from motor vehicles, outboard motors, boats and trailers. Of the 7.45 percent in sales tax collected on motor vehicle, 1.5 percent goes to the city. The sales bill has fallen on a city taxpayer, no matter where the vehicle or other items are bought.
If the ballot measures fail, only local sales taxes would continue to be collected on vehicles and items purchased in Missouri. Cities would lose revenue if a resident went to Illinois to buy a motor vehicle.
Mayor David Zucker said the city doesn’t know how many people would buy a vehicle or other item out of state but most cities appear to be using a 10 percent to 20 percent estimate of revenue loss. That loss may around $25,000 to $50,000 for Dardenne Prairie.
Zucker estimated that a resident buying a $40,000 vehicle in Illinois might save about $600 in local sales tax.