Local Use Tax Proposal

The City of Herculaneum is asking voters to consider a Local Use Tax to ensure fair taxation on purchases made from out-of-state and online vendors.

What is a Use Tax?

A Use Tax is collected instead of Sales Tax when an out-of-state vendor does not have a sufficient legal presence in Missouri to be required to collect Missouri Sales Tax. The State of Missouri already collects Use Taxes. Currently, the City of Herculaneum does not receive any of this Use Tax revenue.

If voters approve the Local Use Tax, the city will begin receiving Use Tax revenue on qualifying purchases made for use in Herculaneum from out-of-state vendors. At no time will both a Use Tax and Sales Tax be collected on the same transaction. A purchase is subject to either Sales Tax or Use Tax, but never both.

Tax Rate

The proposed Local Use Tax would be imposed at the same rate as the city’s total Local Sales Tax rate. If voters later approve a change to the Local Sales Tax rate, the Local Use Tax rate would automatically be adjusted to match.

Property Tax Relief

As part of this proposal, the City of Herculaneum will also reduce its City Property Tax Levy by ten percent (10%). This reduction applies to the city’s portion of Real and Personal Property Taxes and does not affect school, county, or other taxing jurisdictions. The property tax reduction will begin the year following the imposition of the Use Tax and will remain in effect while the Use Tax is collected.

Purpose and Benefits

The purpose of the Local Use Tax is to:

• Treat online and out-of-city purchases the same as purchases made at local businesses
• Protect local revenue as shopping habits change
• Allow the city to maintain essential services while reducing reliance on property taxes

What Services Will This Support?

Use Tax revenue helps support city services such as:

• Public safety
• Street maintenance
• Parks and recreation
• City facilities and operations