Saturday, March 23, 2019

City Use Taxes Unfairly Double Tax County Citizens

This is a reprint of a Facebook post recently made. While it is primarily dealing with a city use tax proposed in my state, it has much broader implications. (Follow the discussion on Facebook)

Open Letter Regarding Maryville Missouri's Proposed Use Tax for Online Purchases
I recently read the “vote yes” opinions for the new Maryville use tax, in the The Maryville Forum, and while those living in Maryville may choose to give away yet more of their income to such an endeavor, I have to disagree that applying such a tax is a favorable thing, for a couple of reasons.
First, the new use tax will unfairly increase the cost of purchases for those living in smaller communities around Maryville, outside the city limits, who do not have their own separate zip codes and therefore have to use “Maryville” as their mailing address. The City of Maryville would be collecting taxes on online purchases made by all Nodaway countians who use the 64468 zip code, even if they don’t live inside the city limits. The out-of-state vendors do not, at present, have a way of determining, when selling a product to someone in the county but outside the city on whether the tax is applicable to the individual. Many people nationwide are already probably paying hundreds of thousands if not millions of dollars for "city use taxes' even though they don't live in the city that has implemented it and that is collecting it and using the funds.
How can the city tax county people a use tax if those folks don’t reside inside the city limits? That’s illegal. Take for instance, Arkoe. Our post office went out a decade before zip codes came into use in the 1960s. We are an incorporated town in our own right. When I make an online purchase, I should not be charged or have to pay Maryville use tax on that purchase. Even though I live in Arkoe, my mailing address is Maryville. We're working on getting our own zip code, but the U.S. Postal Service Office of Inspector General will have to issue it. I do not live in the city of Maryville, but that's my ship-to address. I know there are other home-based businesses out there in Nodaway County, and in other Missouri counties, that are or will be in the same situation. If Maryville's use tax does pass, the City of Maryville should have to refund those overcharged taxes to those outside the city limits for this use tax we will not owe.
It’s happening all over the country. Just like it is around those 150 cities in Missouri that have implemented such a 'use tax. Those who are actually outside of cities are being charged this use tax for their online purchases, money that will go to a city whose legal boundaries they do not actually reside within. Online vendors are erroneously charging and remitting taxes charged to those folks. Not their fault. They are just told they must charge the tax on that shipping address.
Second, the idea that Maryville businesses aren't competing with online out-of-state vendors is not viable. Most of the purchases online are for things that are not available at Maryville stores anyway. They may be specialty items, even books, that are not available through Walmart or Dollar General or Dollar Tree, or through many of our other shops. They may be specialty craft items or office supplies I will use in my out-of-city business. Local businesses are not losing money on those purchases because they do not carry those specialty items I may need. I believe in shopping locally first, and I do so, fervently, but there are times when things I need simply are not available here and I have to source those elsewhere. And, I am capable of ordering those online myself. Many of the services that are local are used by local folks and they pay the tax appropriate for those goods and services.City-based businesses can compete online if they offer their products online and then charge the applicable taxes. If you are selling online, do you know or are you charging and remitting use taxes due to other cities? It's getting so convoluted with regard to taxes that it's going to eventually kill the or stagnate the online marketplace and everyone will lose, including local folks selling to other people nationwide.
And, in case you didn't know it, Missourians doing business already charge a state use tax. Why be taxed twice?
So, if you live within the city limits of Maryville and you want to give away a few more of your hard-earned dollars to yet another tax, go ahead. But, it’s an unfair tax on the rest of the county citizens who technically do not live within the city limits and should not have to be charged the additional money. Some of them may be your friends and relatives.
If you live in one of those 150-160 Missouri cities that have a city use tax, and you don't actually live inside their city limits, you may want to go back and check your online purchases since the use tax was implemented. You may have been unfairly taxed and you may be due a refund.

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