Lawrence Chamber of Commerce debating sales tax signs for businesses in special districts

The leader of the Lawrence Chamber of Commerce said Monday that his group is working to develop a sign for retailers to post that tells consumers how much sales tax is charged inside businesses within a special taxing district.

“But we want to do this in a way that is positive and thanks the consumer in the process,” said Tom Kern, president of the Lawrence Chamber of Commerce. “That way it isn’t perceived as being some sort of scarlet letter.”

Lawrence city commissioners will take the issue up Tuesday night as they begin discussion on a proposed community improvement taxing district for an area near 23rd Street and Ousdahl.

A group of Kansas City area developers is proposing $1.5 million worth of improvements to an area that includes the Hobby Lobby store, Yokohama Sushi restaurant, the former Kwik Shop convenience store and the former Subway sandwich shop.

The improvements would be backed by a 1-percent sales tax charged on purchases made in the district for the next 22 years. The special Community Improvement District tax — a new mechanism created by the state legislature — allows property owners to use the tax to make both public and private improvements.

Some commissioners are becoming more insistent that if the special taxes are to be used in Lawrence, special steps must be taken to make consumers aware of the higher sales tax rates.

“Based on what I’m hearing from the public, I think it is an absolute that notification has to happen,” Mayor Mike Amyx said. “I think that is just a given now.”

Chamber leaders and some businesses had balked at the idea of a sign that would draw attention to the higher-than-normal sales taxes. But Kern said his staff has come up with a sign that he thinks would serve dual purposes. The sign would thank customers for shopping in Lawrence and then state the sales tax rate charged at the business.

Kern said the signs would be made available for all businesses to post, but he said he doesn’t support an earlier proposal require all businesses in the city to post them.

Instead, what likely will be considered by commissioners is a requirement that businesses inside the special community improvement districts be required to post the signs. The requirement also could be extended to other taxing districts, such as Transportation Development Districts that allow for special sales tax rates to be charged.

The city has two of those districts currently: The Oread, a hotel near 12th and Indiana streets; and shops near the northeast corner of Sixth and Wakarusa.

At their Tuesday meeting, commissioners won’t consider final approval for the new 23rd and Ousdahl taxing district, but will discuss how they want the project to proceed.

Developers are proposing to use the special sales tax revenues for both public and private improvements. Plans call for upgrades to sidewalks, storm sewers, parking lots, and a host of building improvements.

The special taxing districts have been touted as a way to help developers finance projects in a tight economy.

“We have a number of commercial centers within Lawrence that are older and could use rehabilitation, could use a facelift,” Kern said. “This is a tool we can use to incentivize a developer to do that.”

In the 23rd and Ousdahl project, Jimmy John’s sandwich shop has agreed to fill the former Subway location. A tenant is still being sought for the former Kwik Shop location.

Commissioners meet at 6:35 p.m. on Tuesday at City Hall.