Proposition 1

When O’Fallon voters go to the polls on Tuesday, April 7, they will have the opportunity to vote on Proposition 1, which would increase funding to the O’Fallon Police Department and road improvements. The funds would come from a use tax placed on items purchased from out-of-state retailers.

What will the funds be used for? The funds will be used first to support the needs of the Police Department and additional funds generated will be used to improve neighborhood streets. Initial improvements for the O’Fallon Police Department focus on technological improvements to help officers do their jobs more safely and more efficiently. These improvements include: ✓ In-car cameras ✓ Body cameras ✓ A new computer-aided dispatch system to replace the current 20-year-old system ✓ License plate readers Future plans also call for the addition of more police officers to keep up with the growth of the City. The City’s Street and Road Improvement Fund also will see additional funds through the passing of Prop 1. These funds will be used to make City streets safer through additional asphalt and concrete improvements on residential streets.

How does a use tax work? Local use tax is collected instead of sales tax when an out-ofstate vendor does not have a sufficient presence in Missouri to be subject to local sales tax. More than 110 Missouri cities and 45 states already have a use tax, including the State of Missouri and St. Charles County. O’Fallon currently does not have a use tax. Without an O’Fallon use tax in place, out-of-state purchases do not get charged the 2% City of O’Fallon sales tax that is charged on local purchases. With a use tax in place, the same amount of sales tax applied on local purchases would apply to out-of-state purchases.

At no time can use tax and sales tax be collected on the same transaction. Because the use tax rate mirrors the sales tax rate on retail purchases made within the City, the use tax will always be equal to the sales tax rate. That means with a use tax in place, a business buying out of state will pay the same tax rate charged on products purchased locally. If the business buys locally, the sales tax applies. If the out-of-state purchase does not have sales tax applied, then the use tax applies. Citizens will have the opportunity to vote on Prop 1 on the April 7, 2020, ballot:

PROPOSITION 1

In order to increase funding for O’Fallon police services and road improvements, shall the City of O’Fallon impose a local use tax at the same rate as the total local sales tax rate, currently two percent (2%), provided that if the local sales tax rate is reduced or raised by voter approval, the local use tax rate shall also be reduced or raised by the same action? A use tax return shall not be required to be filed by persons whose purchases from out-of-state vendors do not in total exceed two thousand dollars in any calendar year.