St. Charles Main Street
Corianna Baier

Ever wondered why you pay way more in sales tax at one store than at another store just down the street? St. Charles County shoppers might soon get the answer, as some want increased transparency for Community Improvement Districts (CIDs). CIDs are political subdivisions that were originally intended to fund public improvements through taxes and fees. Unfortunately, CIDs are now often used in ways that primarily benefit private developments. St. Charles County recently announced the introduction of a bill that would inform consumers about the extra sales taxes they pay in those districts and the benefit the owner received from their tax dollars.

This bill would require businesses located in CIDs to display signs at public entrances and point of sale areas that state the rate of the tax imposed or increased at the business by the CID. The signs must also include the direct benefit received by the owner of the property on which the business resides and the expiration date of the tax. 

According to the news release, the bill is intended to:

. . . highlight that often a small number of property owners can authorize sales taxes that are paid by all shoppers in the CID, and that businesses in a CID can be forced to collect a sales tax that does not directly benefit the property on which it is located.  

Analysts at the Show-Me Institute often discuss these very problems with CIDs. Consumers are typically unaware of district locations and voters hardly ever get a say on CID sales taxes.  The information on these signs would provide people the information they need to make informed decisions as consumers.

Increasing transparency for CIDs would be a good thing for the shoppers of St. Charles County, but why are reforms like this confined to one county? Special taxing districts like CIDs will continue to take tax dollars from uninformed citizens until these districts are reformed statewide.

 

About the Author

Corianna Baier
Corianna Baier
Analyst

Corianna grew up in Michigan, where she earned her B.S. in Economics from Hillsdale College.