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Cottleville close to placing use tax on Aug. 7 ballot

Cottleville may be the latest St. Charles County municipality to ask its residents to vote on whether to impose a “use tax” on goods totaling $2,000 or more annually and purchased from out-of-state vendors.

The city’s Board of Aldermen gave a first reading to a bill at its March 14 meeting to place the use tax on the Aug. 7 ballot. A second reading and vote may take place at the board’s April 18 meeting.

A use tax is a sales tax applied to the purchase of goods by Missouri residents and businesses from out-of-state vendors. Currently, sales tax applies only to local retail purchases in Missouri. It is designed to capture lost sales tax revenue. It is applied to the same type of products subject to sales tax; items exempt from sales tax would be exempt from a use tax.

Currently, 45 states and 105 Missouri cities with populations over 5,000 have use taxes in place, including Wentzvllle, Foristell, the state of Missouri and St. Charles County.

A use tax in Cottleville would be 2 percent, the same as the city sales tax. If that sales tax rate is raised or lowered, the use tax would follow suit. The Missouri Municipal League has estimated that a use tax in Cottleville might generate $65,000 annually.

If Cottleville agrees to place the use tax on the ballot, it would join Lake Saint Louis, St. Peters, O’Fallon and St. Charles in placing use tax proposals on the August ballot.

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