The Village of Innsbrook is asking residents to once again consider a tax proposal that would extend the village’s sales tax to include online purchases.

The Village Board of Trustees voted unanimously on Dec. 13 to place the tax question on election ballots this April as “Proposition U.” The ballot measure would apply Innsbrook’s current sales tax rate of 0.875% to any item purchased from out-of-state and transported to Innsbrook.

Innsbrook’s Proposition U is part of an ongoing trend among local-level governments in Missouri to update their tax laws to function in an internet-based economy. A state law allowing municipalities to tax online sales wasn’t passed until just last year. Prior to that point, items purchased online were potentially not subject to any sales tax at all.

When Innsbrook voters view Prop U on their election ballots, the tax will be referred to as a “use tax,” which is basically just a sales tax that’s applied to an item purchased from out-of-state. The ballot won’t have any reference to internet sales, although that is the main interest of this proposition, according to village board Chairman Jeffry Thomsen.

Missouri’s 2021 tax law update allows local governments to apply their use taxes to online sales. However, towns that don’t already have a use tax in place — which many don’t — must get that tax approved by voters before putting the charge on internet sales.

Thomsen explained that the primary motivation for the tax proposal isn’t to generate more revenue for the village. It’s to create a more fair playing field for businesses that have chosen to be physically located in the community. The current lack of tax for online retailers allows them to sell products for a lower price and undercut local shops, Thomsen said.

He clarified that some internet-based companies do voluntarily collect sales tax for the village even without an ordinance in place, but that he thinks the village needs to codify that tax, rather than relying on the discretion of online retailers as to whether they’ll collect it.

“Our philosophy at Innsbrook is really not to raise taxes, but we thought that this was an appropriate one,” Thomsen added.

In April last year, the Innsbrook Board of Trustees proposed a similar tax proposition. Less than 130 people (25% of registered voters) participated in the election, and turned down the tax by a margin of just four votes.

Thomsen said that trustees would like to do a little more to educate voters about the proposition ahead of their second attempt, but that ultimately it’s up to the residents of Innsbrook to decide if this is something they want.

“The majority of voters decide what we do and what we don’t do, and I’m happy with that,” Thomsen said. “If we lose again, that’s fine, as long as we’ve presented it to them.”

The village doesn’t have specific plans for any additional revenue that might be generated by the online tax, Thomsen said.