Jackson County proposes “use tax” on the November 7 ballot

South KC Perspective

By John Sharp

Jackson County voters will decide in the November 7 election whether to approve a use tax which is similar to a sales tax on extremely large purchases of products that will be used in Jackson County from out of state vendors that don’t have a physical presence in Missouri and currently do not have to charge sales tax on such purchases.

A fact sheet on the issue prepared by the county government said approval of the tax, which requires a simple majority, “…would level the playing field with out-of-state retailers paying the same tax rate as required of businesses located in Jackson County”. 

County Administrator Troy Schulte said in an interview the proposal is essentially a tax on very large business purchases from out-of-state vendors since the first $2,000 in taxes that could be due under the proposal would not be charged.  

Based on the county’s current sales tax rate of 1.375%, that means the first $145,454 of any large purchases from out-of-state vendors would be exempt from the use tax.

“This is really a tax on businesses,” Schulte said, noting that very few, if any, individuals will ever make purchases exceeding that amount from out-of-state vendors for use in Jackson County.

The county estimates the use tax will generate about $30 million annually beginning in April 2024.  The ballot language says the proposed use tax will be for:

• Financing road and bridge construction projects within the county, including projects within the corporate limits of cities within the county;
• Financial assistance to homeless persons and persons at risk of becoming homeless; and
• Renovations and repairs to the Jackson County Courthouse in downtown KCMO and the Eastern Jackson County Courthouse and Historic Truman Courthouse in Independence.

It also notes that the use tax rate would be the same as the county’s sales tax rate, and if that rate is reduced or raised by voter approval, the use tax rate would also be reduced or raised.

One of the proposal’s greatest selling points for residents of cities in Jackson County is that it allows the county to help pay for street and bridge improvements within those cities.  

Currently, although all property owners in the county pay county road and bridge taxes, ever since the county stopped funding the County Urban Road System (CURS) program several years ago, funding from that tax is spent on transportation improvements in unincorporated areas of the county, and none of it is spent on streets and bridges within cities.

When the CURS program was still in operation, as a KCMO city councilman I was able to secure substantial funding from the CURS program to pay for much of the cost of widening Longview Rd. from Blue Ridge Blvd. to Raytown Rd. and installing sidewalks on both sides of the street from Blue Ridge nearly to Raytown Rd.

While not legally binding on the county legislature, the fact sheet said the county intends to spend about $10 million annually for road, bridge and trail improvements, prioritizing projects connecting the cities in the county.

“Funds would be granted to the cities for design and construction of projects that link the county together to reduce congestion and improve traffic safety,” it said.

Ist District County Legislator Manny Abarca, chair of the legislature’s Budget Committee, said he hopes to prioritize funding for high priority street and bridge projects within cities in the county if the measure passes since they have not received any financial assistance from the county for so long.

The fact sheet said the county intends to spend about $5 million a year to fund projects that provide “affordable and very affordable” housing and to help fund agencies that work to prevent homelessness.

It said the county intends to spend about $15 million per year for improvements and renovations to the three county courthouses.  The fact sheet and both Schulte and Abarca estimated that deferred and ongoing maintenance needs at just those county facilities total hundreds of millions of dollars.