Olathe ? Gov. Kathleen Sebelius, who has granted Kansas merchants an indefinite grace period on the state’s new sales tax law, said the unpopular measure stood a good chance of being repealed in 2004.

“If it becomes impossible, with the cost-benefit analysis showing (that) … then I think the Legislature will repeal it,” Sebelius told Johnson County business owners Monday.

Her advice remains the same: “Right now, if I were you, I’d collect sales tax the way you always have and send it in.”

During the grace period, extended early last month, retailers will not be held liable for failing to properly comply with the new law. It was passed so that Kansas could be part of the nationwide Streamline Sales Tax Compact.

The goal of the compact is to force Internet and mail-order businesses to pay sales taxes to the states where their goods and services are delivered.

Sebelius said Kansas was losing an estimated $71 million to $151 million every year because of sales tax revenue that is not being paid on products and services.

The problem is that the majority of the other 16 states in the compact voted to have taxes collected at the point of distribution, not the point of sale. That works well for them because their state laws are already geared toward destination collection.

However, Kansas law is not, and Sebelius said the fact that Kansas has more taxing jurisdictions than any other state is just part of the problem for Johnson County business owners.

“Johnson County has some unique problems because there are 20 different taxing jurisdictions and six different tax rates,” the governor said.

She said the national committee that was orchestrating the Streamline Sales Tax Compact was due to meet in November to further refine it, and that it likely would provide some relief for some businesses.

Additional help is on the way from the Kansas Department of Revenue, Sebelius said, in the form of free software that should be available in eight to 10 weeks.

Theoretically, it will provide business owners with the proper sales tax rates depending on where goods are delivered.