Taxable Sales Down in Many St. Louis Areas

Most of us know that when you shop, the price on the tag is not the price you pay at the register. Sometimes these prices aren’t even close (especially in Missouri) thanks to sales taxes. With a state sales tax, local sales taxes, and special taxing districts, Missouri governments collect a lot from taxable sales. However, sales taxes are a volatile form of revenue. It can be risky for governments to rely too much on sales tax revenues because they can drop drastically during economic downturns. This article from NextSTL helps illustrate this problem.

The article compares 2019 and 2020 taxable sales throughout the St. Louis area. Most of the St. Louis area saw a decline in taxable sales when comparing the second quarters of 2019 and 2020. St. Louis County taxable sales were down by just over 10 percent, while St. Louis City taxable sales were down by over 25 percent. The image below from the NextSTL article shows the change in taxable sales by zip code. Notably, taxable sales were down 89 percent in the Downtown zip code, 76 percent in the Airport zip code, and 75 percent in the Downtown West and Midtown zip code.

Taxable Sales/Use % Change Apr-Jun 2020 v 2019

This makes sense—a lot of these zip codes rely on visitors, bar and restaurant patrons, and office workers spending their money away from home. All these things became rarer during the economic shutdown.

So what is one takeaway from the pandemic? Our governments need to take a hard look at how they are generating revenues. If revenues are unpredictable, promised public services can be compromised.