City Manager David Corliss stands in front of the crowd and tugs on the lapel of his suit jacket – David Letterman style – and delivers his now-standard line about the city’s proposed 0.55 percent sales tax increase.

“When Corliss goes and buys another $100 suit, it will cost me an extra 55 cents,” Corliss says at a recent Chamber of Commerce luncheon.

Thus far, the line is drawing a laugh – and for the most part – a nod of agreement.

Voters will go to the polls on Nov. 4 to decide three separate sales tax proposals – a three-tenths of a percent tax for infrastructure improvements, a two-tenths of a percent tax to fund basic public transit operations, and a five-one hundredths percent tax to fund enhancements to the public transit system.

Retailers’ reaction mixed

Debate already has been fierce about whether the community should continue funding public transit operations, and the condition of city streets is always a hot topic.

But so far, discussion has been sparse about whether another 0.55 percent in sales taxes would harm the city’s retail community. That discussion, however, may be on the way – especially as national economic news worsens.

“I think people will start paying attention to almost every dollar because of everything that has been going on in the last few weeks,” said Win Campbell, a founder and employee of the downtown home furnishing store Winfield House. “This crisis has put the focus on where your money is going, right in front of us.”

Not all retailers, though, are worried that the tax increase would hurt their businesses. That’s in part because even with the increase, Lawrence’s total sales tax would still be in the ballpark of the rates of other area communities.

“I think people will notice it for the first couple of months, but after about six months it will be part of the landscape,” said Jane Bateman, president of South Iowa Street’s Jane Bateman, The Interiors Store.

Still in the ballpark

If all three sales tax proposals are approved, Lawrence’s total sales tax rate would increase from 7.3 percent today to 7.85 percent. The increase essentially would take Lawrence’s rate from among the bottom half of those charged by major Kansas cities to the top half.

The rate would be higher than Topeka’s rate of 7.45 percent, but still less than many of the major shopping areas in the Kansas City metro area.

For example, shoppers at Oak Park Mall in Overland Park are charged a 8.025 percent sales tax. Shoppers along 119th Street in Olathe generally are charged an 8.525 percent sales tax. Those rates may go up, too. Johnson County voters are being asked to approve a new 0.125 percent sales tax for education and research.

Shoppers at The Legends near the Kansas Speedway in Wyandotte County are charged a mix of rates. Many of the shops in the actual Legends portion of the development charge an 8.15 percent sales tax. But the two largest retailers in the area – Nebraska Furniture Mart and Cabela’s – charge a 7.65 percent rate.

How it’s charged

But it also is worth noting that the rules of how sales taxes are charged have changed significantly since 1994 when the community last considered a sales tax increase.

Today, it is possible to shop out of town but still end up paying the Lawrence sales tax rate. For example, if you buy a piece of furniture from Nebraska Furniture Mart and have it delivered to your home, you will pay the Lawrence sales tax rate. If you load the piece of furniture in your truck, however, you will pay the 7.65 percent rate.

With vehicle purchases, you are assured of paying at least the Lawrence sales tax rate regardless of where you purchase the vehicle. For example, if you purchase a vehicle in Topeka, you will be required to pay the difference in sales tax when you register the vehicle with the Douglas County Treasurer’s office. If you buy the vehicle in Ottawa – where the tax rate is 7.9 percent – then congratulations, you’ve helped the state with its revenue situation. In other words, you won’t get a refund on the amount you’ve paid over the Lawrence rate.

‘Such a small amount’

That change in the law – which started being enforced in 2005 – has muted some of the opposition that has traditionally come from car dealers toward sales tax increases. But that doesn’t mean there’s still not concern.

Dale Willey, president of Dale Willey Automotive, said the sales tax increase may not cause people to shop out of town for a vehicle, but it may cause them to delay purchasing one altogether.

“It’s just raising the burden on everybody who has to buy a car,” Willey said.

Some big-ticket retailers, though, think Lawrence consumers will adjust. Jeff Cullen, manager of Stoneback Appliances at Ninth and Iowa streets, said consumers are more likely to leave the city because of the initial price of an item instead of the sales tax that is charged.

“I’m sure we’ll hear about it when we ring them up,” Cullen said. “But for the most part, Lawrence people are pretty good about shopping local.”

Consumers out-and-about this week mainly were not overly concerned about the potential tax increase, although several said it would become more important as the price of the item they were purchasing increased.

“For most purchases it is just such a small amount,” said Lawrence resident Carol Whitaker, who was leaving Chico’s in Downtown Lawrence. “It probably is something you should pay more attention to, but it just goes so fast.”