October 23, 2021
Here are the “real” facts about the upcoming election on the Raytown Use Tax
On Nov. 2, Raytown voters will be asked to go to the polls and vote “yes” or “no” on a local use tax. This single ballot question will be a game changer. If passed it will generate an estimated $200,000 to $400,000 annually for our general fund. It would generate funds to help pay for such city services like street repairs, street maintenance, and additional police officers.
How will this be funded? Simply by doing what Raytown citizens are already doing, shopping online with certain out-of-state vendors. We all know the shift to online shopping reached an all-time high during COVID-19. In fact, nationally, consumers spent $861 billion online with U.S. merchants in 2020, according to Digital Commerce 360 estimates. That is a 44 % increase from the previous year. Consumers are using internet sales as their primary shopping method, and currently the City of Raytown does not receive sales tax on those purchases. That’s 2.5 % on each transaction that the city is not collecting. This small percentage adds up over time and across purchases.
Therefore, it is so important for our citizens to carefully consider this ballot question and what it will mean for our city.
I say this all the time. Raytown is a great town. Our city is rich in community spirit. We are proud of what our city offers. If we are to maintain our quality of life, we must level the field between local brick and mortar stores and online retailers.
Right now, the city is using its reserves to keep up with maintaining basic city services. City property taxes have remained the same since 1978. Most other taxes the city collects are dedicated for specific purposes and cannot be used in the General Fund. So, let’s just think about this. Are you making the same wage from 1978? Of course not. Why should the city be expected to try and meet current day expenses with a 1978 paycheck?
Many untruths and misperceptions are being circulated about the use tax. Here are the facts:
- It’s Not a tax increase. The local use tax will not increase or change our local sales tax. It will only be applied to some out-of-state online purchases.
- It is Not a double tax. A local use tax would only be applied to goods purchased, delivered and used in Raytown from certain online and out-of-state vendors, instead of a sales tax. You will never pay both taxes on a single transaction.
- It is Not a new tax. Local retailers are already collecting a local sales tax. A use tax would allow the city to collect a use tax (sales tax) from out-of-state retailers or online vendors.
In simple terms, an online sales tax, better known as a use tax, simply requires online merchants to charge sales tax, which is then issued to the municipality in which the purchase was made. In Raytown, brick and mortar stores charge a 2.5% local sales tax, which is the exact same amount consumers would pay for online purchases if the use tax passes.
You see, it is the responsibility of your local government to offer services that citizens expect, like roads and public safety. In Raytown, those items, among many others, are paid for by sales tax dollars. The longer Raytown goes without a use tax, the harder it will be for the city to support economic development projects. If a city cannot provide support to economic development, then it will be more difficult to attract new businesses and new residents, as well as keeping the longtime residents here.
Let me say this. I am not a tax and spend kind of guy, but this city has done all it can with the resources we are given. Expenses keep going up, while the citizens keep expecting more and better services. These services take money to maintain and improve. We all want better roads, police and infrastructure. It takes money. We are losing or leaking tax dollars to internet sales at a rapid rate. It is time to make things fair for the brick-and-mortar stores that have a footprint in this city and must collect taxes on their sales. Please be educated on what this measure truly means for us now and on into the future. It is time to replenish the supply of tax dollars lost to internet shopping so that we may continue to support city services and keep this wonderful city moving forward, not falling behind.
This city is a wonderful place to live, work and play. Give your city government the tools to maintain services and move forward with projects to enhance our lives here. I am asking as your Mayor and longtime fellow citizen to please vote yes on this measure on November 2nd, 2021.
Thank you for your time and thank you for your vote for our town’s future. God Bless.
Sincerely,
Mayor Mike McDonough
