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Archive for Saturday, January 24, 2004

Relief proposed over sales tax law

January 24, 2004

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— House Democrats will seek relief for small businesses to help them deal with a sales tax law approved last year, House Minority Leader Dennis McKinney said Friday.

Democrats are proposing a tax credit of up to $1,000 for computer equipment and software businesses buy to comply with the law. McKinney, D-Greensburg, said the credit would be against the sales tax revenues a business is supposed to collect from customers and send to the state.

The new law, which took effect July 1, requires merchants to collect sales taxes at the rate imposed where their goods are delivered. For decades, merchants have collected the tax at the rate in effect where their businesses are.

The new law means merchants who deliver goods to people in more than one place must worry about multiple sales tax rates.

The state imposes a 5.3 percent sales tax, but cities and counties can add their own local taxes, which can raise the total rate paid by consumers to 7.8 percent.

Supporters of the sales tax change, including Gov. Kathleen Sebelius, have argued it is a step toward collecting $100 million or more annually in taxes on Internet purchases.

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