UseTax

What is a local Use Tax?

A local Use Tax is a tax on the purchase of goods by Cleveland, MO residents from out-of-state vendors. Products exempt from the local Sales Tax would be exempt from the local Use Tax.

I already pay sales tax. Will I be charged double?

No. The Sales Tax applies to purchases made at local retailers within the city limits, while the Use Tax applies to purchases made from out-of-state vendors. Purchases cannot fall into both groups and cannot be taxed twice. 

What is the rate of the Use Tax?

The local Use Tax rate would be the same as the local Sales Tax rate which is currently 2.00%. If the local Sales Tax rate is reduced or raised by voter approval, the local Use Tax rate would also be reduced or raised by the same action.

What happens if the Use Tax passes?

If it passes, the City will have an additional source of funding to address infrastructure issues such as water/sewer improvements, road maintenance, and public safety projects such as sidewalks. The funds could also be a way to leverage matching federal and state grants needed to proceed with such projects.

What is the impact to a citizen?

The City collects a 2.00% local sales tax on all goods or services purchased from local businesses. The use tax would be imposed at the same rate (2.00%) for any online purchase made through an out-of-state vendor.

As an example, a $100 online order from a company like Amazon would result in an additional $2.00 in use tax, which would be used by the City to fund infrastructure and public safety projects.

How much revenue would the Use Tax generate?

The City estimates the Use Tax will generate up to $85,000 per year.

According to Missouri Department of Revenue reports for the last three years the Use Tax would have generated revenue totals of $55,032 for FY 2023, $70,475 for FY 2024, and 82,198 for FY 2025.