Every business in Lawrence could have sales tax sign
There soon may be new signs that Lawrence is unique.
A majority of city commissioners on Tuesday expressed interest in requiring businesses that charge a special sales tax to post signs that notify consumers of the higher-than-normal rate.
But commissioners may not stop there.
They agreed to study an idea of requiring every business in the city to post a sign stating the sales tax charged at that location.
“It wouldn’t be a scarlet letter if everybody had to post a sign,” City Commissioner Mike Dever said. “It would level the playing field and create less of an appearance of unfairness toward one group of businesses.”
If approved, Lawrence would become the first city in the state to take such extra steps to ensure consumers are aware of how much they’re paying in sales taxes.
The sign idea comes as commissioners begin to receive applications for Community Improvement Districts. The districts allow businesses within a defined area to levy up to an additional 2 percent in sales taxes, if city commissioners approve of the districts. The extra sales tax money can be used for both public and private improvements in the district, including some operating expenses of the businesses.
Commissioners said they have heard multiple concerns from residents who fear they may buy products at locations without knowing they are paying the extra tax. No one from the public, though, spoke out against it Tuesday.
Instead, members of the business and commercial real estate communities urged commissioners to not adopt the new regulations. The Lawrence Chamber of Commerce told commissioners it was concerned the signage may cause some retailers to bypass Lawrence.
Commissioners Rob Chestnut and Lance Johnson also expressed concern about the message the regulations might send.
“I felt like we were just about ready to have a good message on economic development, and now I feel like we’re about ready to fumble the ball,” Johnson said.
Commissioner Aron Cromwell presented the compromise idea of requiring all businesses to post their sales tax rate. Commissioners did not take a vote on the proposal, but rather directed staff to meet with the chamber on the issue.
“I believe it is important that we do something more,” Cromwell said. “We don’t want to create any perception that this is a secret tax or people don’t know what they are paying.”
Details about what type of signs a business would have to place weren’t discussed. But originally, staff members had suggested that an 8-inch-by-8-inch sign with 36 point letters be placed at the primary entrance of a business. Commissioners weren’t given an estimate on how much those signs may cost a business.