When state or local officials suggest an increase in the sales tax rate, there almost always is discussion about the fact that Kansas collects sales tax on food. Taxing the food people purchase at the grocery store is a “regressive” tax because it falls disproportionately on low-income people who spend a higher percentage of their money on necessities like food and shelter.
Why, then, would Kansas legislators propose adding a sales tax to another of life’s basic necessities: utility bills?
The answer, of course, is that state lawmakers are looking at all kinds of unpalatable ways to address the state’s budget deficit. It’s good that they are looking at eliminating some costly sales tax exemptions, but eliminating the exemption on residential water, electric and natural gas bills should be low on the list.
Raising taxes on optional purchases, like cigarettes or alcohol, makes some sense. Starting to collect sales tax on other optional purchases, like Girl Scout cookies, could be a valid strategy. A recent story in the Journal-World also pointed out inconsistencies in non-profit agencies having to pay sales tax because legislators have approved so many individual agency requests for exemptions. Those inconsistencies should be remedied.
Low-income Kansans are eligible to receive sales tax refunds if they file the proper forms, but many states simply choose not to collect sales tax on food because buying food is a necessity, not a choice. In more prosperous times, Kansas might consider doing the same. That won’t happen this year, but the state should at least avoid adding another regressive tax to the heating and electric bills many low-income Kansans already are having trouble paying.