Columbia proposes adding a use tax for online shopping

COLUMBIA, Mo. (KMIZ)

Next year, people in Columbia may pay more in taxes when purchasing items online.

The city says if voters approve a use tax, it could bring $5.6 million to the city each year. Currently, the city collects a 2 percent local sales tax for in-store items.

Stefan Sheffield, a store manager at Slackers says he's not against adding a 2 percent tax to his items online especially if the money will help the community.

"Not really sure exactly how to feel about it but typically I personally am like a pro-tax kinda person," Sheffield said.

And Sheffield says if voters approve the two percent tax, he's not worried that it will affect his online sales.

"I wanna say like 80-20 as far as in-store sales vs online. It's probably not going to make that much of a difference," said Sheffield.

Nationwide, online sales rose 30 percent during the pandemic and it now represents 13 percent of total retail sales. Because of the shift to online shopping, the city says it's missed out on $30 million in tax revenue over the past 5 years.

Matthew Lue, finance director for the City of Columbia, says adding a 2 percent tax to online sales is no different than shopping in stores.

"It will impact the consumers the same way as buying something in a store. It would be the same 2 percent sales tax that we collect on person-to-person shopping," said Lue.

If the city receives the additional money, it could help pay for public safety, public health, streets, sidewalks, and more.

"The faster we can get those fixed the better, and hopefully the higher taxes will help that," said Sheffield.  

 Voters will decide on April 5 whether or not to approve the 2 percent local use tax.