The Missouri City Council has voted to include a proposition at the next election on the question of whether to impose a local use tax. The election will take place Tuesday, November 3, 2026.
A use tax would ensure that purchases from online vendors located outside of the state are subject to the same local tax rates as those purchases made from local vendors.
It would also help the City maintain its revenue while continuing to provide the services our residents expect.
Official ballot language
PROPOSITION 1
Shall the City of Missouri City, Missouri impose a local use tax at the same rate as the total local sales tax rate currently one percent (1%), 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?
☐ YES
☐ NO
If you are in favor of the question, place an “X” in the box opposite “YES”. If you are opposed to the question, place an “X” in the box opposite “NO”.
Additional information on Use tax vs. Sales tax
What is a use tax?
A use tax is a local tax on goods purchased from out of state (most often online) for delivery to and use in Missouri City, MO.
Currently, Missouri City Mo collects a 1% local tax on all goods and services purchased from local businesses. However, that is not the case for purchases made online from out-of-state vendors.
For example, if a person purchases a piece of furniture at a store located here Missouri City, the vendor collects a state and local sales tax on that item. However, if the same person purchased the same piece of furniture online from a vendor located outside the state of Missouri, the vendor is not required to collect the same local sales tax.
If voters approve Prop 1 on November 3rd, 2026, a 1% local use tax would be collected on goods and services purchased from out-of-state vendors. The revenue generated from the use tax would be allocated in the same manner as the City’s local sales tax which funds public safety, streets and maintaining city assets including the Municipal building, shed and church.
The use tax rate would be the exact same as the resident’s local sales tax rate. Residents would never have to pay both use and sales tax on the same purchase.
What would a use tax mean for Missouri City residents and businesses?
A use tax would eliminate the disparity in tax rates collected by local and out-of-state sellers by imposing the same rate on all sellers.
If voters approve the Prop 1 ballot measure, online, out-of-state purchases would be taxed at the exact same rate as in-state purchases.
The funds collected by the use tax would be spent in the same manner as the local sales tax.
The City relies on revenues from local sales tax to fund basic services, such as road and city maintenance and public safety. For perspective, Missouri City collected $18,402 in sales tax in 2025. We are on pace to collect only $8000 in 2026 as revenues continue to decline year over year.
Funding sources that better reflect consumer behavior
Online shopping has become much more prominent in recent years, and the general trend is that in-store shopping is decreasing steadily.
Nationwide, online sales rose 30% during the pandemic and now represent more than 13% of total retail sales.
With the rise in e-commerce, the City is seeing a decline in sales tax growth. To keep pace with this trend, the City must modernize its revenue sources to continue to provide the essential services our residents expect.
The City relies on revenues from local sales tax to fund basic services, such as road and city maintenance and public safety. For perspective, Missouri City collected $18,402 in sales tax in 2025. We are on pace to collect only $8000 in 2026.
FAQs
I already pay sales tax, is this the same thing?
No. The sales tax applies to purchases made at retail within Missouri, while the use tax applies to purchases made from out-of-state vendors. Purchases cannot fall into both groups and therefore a purchase would not be taxed twice.
What is the use tax rate?
The use tax is imposed at the same rate as the total local sales tax rate, currently one percent (1%). 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.
Do other Missouri cities have a use tax?
Yes. Approximately half of all Missouri cities with populations of 2,000 or more already have a use tax in place. Large cities with a use tax are Kansas City, St. Louis and Springfield. Cities around Missouri City with a use tax are Liberty, Excelsior Springs and Orrick.
Will the use tax apply to online purchases?
It depends on where the transaction occurs. If goods are purchased from a vendor located in Missouri, sales tax is applied at the rate applicable to the vendor’s location. If goods are purchased from a vendor outside of Missouri the use tax applies.