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Archive for Wednesday, June 23, 2010

Every business in Lawrence could have sales tax sign

June 23, 2010

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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.

Comments

SettingTheRecordStraight 4 years, 5 months ago

I hate unnecessary government mandates, so I oppose the proposed requirement. However, at least this requirement will remind all Lawrence shoppers of Kansas' unnecessarily high sales tax rate (which will increase by over 18% on July 1).

chocolateplease 4 years, 5 months ago

These extra taxes are indeed hidden! Who asks about sales taxes when they shop? Most people make the default assumption that taxes are the same where ever they go in a town, and store owners who receive this kind of money are hoping to keep it that way by opposing the signs. These monies are a direct handout straight from the pocketbooks of people who shop there into the businesses owners' hands, all without any required disclosure.

So now that the City approves of this kind of thing, there are commissioners who don't want businesses to have to put up any kind of notice to customers about what they are doing? I suggest a boycott of all the businesses who receive this kind of handout. Exactly which businesses are these? Can the LJW print a list or map showing where they are located?

I remember that a special tax district was approved for the new Bauer Farm development - the CVS, Taco Bell, and whatever else is over there (6th and Folks Rd.) Is there anywhere else where this is happening?

I find it insulting that any business would charge me extra tax, pocket it for their own benefit, and then refuse to put a sign up about it (without legally being required to). Maybe we should picket those businesses.

Adrienne Sanders 4 years, 5 months ago

The only other one at this time is the Oread Hotel and all the various bars & restaurants in there.

puddleglum 4 years, 5 months ago

I agree....I really hope that whole paycheck, I mean wholefoods doesn't go into the bauer farm racket-cuz I will not shop there. I will not shop anywhere in town if they charge me additional tax to "repay" the developers...its like the turnpike...what happens once the developers are repaid? will the tax settle back down to whatever everyone else is charging, or will they continue to charge the tax and pocket all of it? someone, anyone-please let me know if this addressed at all.

smercer 4 years, 5 months ago

CIDs last 22 years.

It is worth noting that CIDs don't simply reimburse for project development costs. They can be used to pay ongoing operational costs such as marketing, janitorial services, and so on. Costs that do not end, per se.

dubstep 4 years, 5 months ago

Yes the TDDs and TIFs are limited in their timeframe, and I believe they are limited in the total amount a business can recoup. You'd have to look at each deal because they are created for a specific development. I believe the Oread is 10 or 15 years not sure, but it will only last until the full price the developer is elegible to receive is recouped.

Don't hold me to that 100%... but that was the jist of the TIF and TDD, they have more strings attached than CIDs.

Orwell 4 years, 5 months ago

Well, there's a creative solution. Instead of making the merchants who cause the problem give the proper notice to consumers, let's place a new requirement on the merchants who DON'T try to benefit from this improper transfer of the taxing power to private business for private purposes.

Sorry, Mike, the beneficiaries of this ripoff SHOULD bear a scarlet letter – as should every Commissioner who supports this travesty. If there's a legitimate public purpose for imposing this tax, it should be borne by the entire city. If there isn't a legitimate public purpose, a tax shouldn't be authorized at all. Let them charge prices, not a special selective tax, to cover their business expenses.

melott 4 years, 5 months ago

It's pretty clear that the idea of having them all post a sign is to cause people to ignore the ones that have a different number on them.

dubstep 4 years, 5 months ago

Agreed! Johnson is SO far to the side of business over the public.

smercer 4 years, 5 months ago

Tax subsidies provided to businesses should be publically available. Why don't we require each business to post in their windows the amount of tax breaks received through TIFS, TDDS, CIDs, IRBs, abatements by year? If business are not shy about asking the public to subsidize their profits, these same businesses should be happy to proudly post the amount.

We often see signs near highway construction that say how much the project cost and who funded it. We could post signs that say: "This Jimmy Johns was moved three blocks down the street. Lawrence, KS taxpayers provided $X Million in additional sales taxes to help this business move." Bon Appetit.

Tom Hilger 4 years, 5 months ago

I will look at the receipt and ask for a full refund at that time.

Mkultra 4 years, 5 months ago

How about all posted prices must include all taxes

SettingTheRecordStraight 4 years, 5 months ago

Then we would grow numb to the enormous sales tax burden placed upon us.

Built-in taxes are hard for consumers to identify. That is why the government is considering a value added tax which will be buried in the price of all goods. Similar taxes are already what make the cost of things like gasoline and alcohol so high.

mr_right_wing 4 years, 5 months ago

Signs, signs, everywhere there's signs! Blockin' up the scenery, breakin' my mind. Do this, don't do that, can't you read the sign?!

Gail Grant 4 years, 5 months ago

The places with higher tax should be marked clearly. Unless I was reading the paper I wouldn't have known that the west side CVS charged me extra 1% over any other pharmacy in town

average 4 years, 5 months ago

Will businesses that don't charge a self-serve 'tax' (say, Home Depot, if a new Lowes' charges it) be allowed to put up a huge banner proclaiming that they don't play that crap? Or would that be unfair?

Ron Holzwarth 4 years, 5 months ago

Yes, Ami. You can bet your bottom dollar that they don't want you to know about the extra tax! That wouldn't be good for business.

Hwy50 4 years, 5 months ago

I guess I just don't understand the whole point of the extra tax. If the money just goes back to the business, why are they not just raising their prices equal to the tax they want to charge? What's in it for the city since it just makes the government look (more) greedy when its the business wanting the money?

just_another_bozo_on_this_bus 4 years, 5 months ago

I've been told that banks like the CID's and will use them as a form of collateral when lending to businesses and developers.

But I don't see how this does anything to make the businesses any more viable. If they aren't making enough sales to stay afloat, sooner later they'll go out of business, and 1% or 2% of nothing is nothing, which is what the banks would get out of the special tax.

jafs 4 years, 5 months ago

Yes, there was something about that in the paper.

Somehow, banks seem to think that this sort of tax is a more reliable indicator of possible success than simply raising prices.

I guess that's because people don't know they're paying it?

So, if we're notified, maybe it won't work :-)

Sue McDaniel 4 years, 5 months ago

What ever happened on the Lowe's that Bauer was supposed to be getting?

gl0ck0wn3r 4 years, 5 months ago

How about a sign for every business that includes the sales tax rate at the store and a brief breakdown of where that money goes?

somedude20 4 years, 5 months ago

They have to tell us what is in our food. They have to tell us about the side effects from the drugs we take. They have to tell us about the finance charges when you get a credit card. On my cell phone bill I can see every little thing that I get nickeled and dimed for so why should it be any different when it comes to extra fees (taxes) that effect us?

puddleglum 4 years, 5 months ago

they don't want to tell you what is in your food...remember last year, when the california beef growers association won the court decision? They are now NOT required to label their product as cow, or cloned cow

BigPrune 4 years, 5 months ago

A breakdown would be nice, then Lawrence should charge a transient fee to all the KU students. They can pay at enrollment each semester since KU is exempt from paying property taxes (subsidized by everyone's tax dollars), and this way KU is paying their fair share! How do you like that one "progressives?" Sounds perfectly reasonable to me. Fair is fair after all.

just_another_bozo_on_this_bus 4 years, 5 months ago

Why? Unless they live in the dorm, they already pay property taxes (it's included in their rent) and sales taxes. And income taxes go to the state, not the local government.

nut_case 4 years, 5 months ago

Having every business display a tax sign would be good. Would people start to take notice when they realize 25% of their earnings evaporate as 'income tax', another 8%+ disappear in sales tax, then you have personal property tax, vehicle tax, gasoline tax, tax on electricity, water, natural gas, etc?

Though I still say special tax needs a special sign. If a business intends to stick it to the public even more than usual, they should at least be straight forward about it. Blending special tax signs in with normal signs is a bit chicken $#^! if you ask me.

Ralph Reed 4 years, 5 months ago

@BP, re: your 1151. I've suggested that several times but got laughed at. Maybe a prominent individual like you won't get laughed at. KU topped 30K students in Sep 2009. Charge a $25 "head tax" per semester. That's an estimated $750K each for the Fall and Spring semesters, and let's say 1/2 of that ($375K) for the summer. Totals out to $1875K per year to the city. Double that if the head tax is $50 per semester.


I agree that businesses don't want to show the truth. It's important that we know what we're spending. Further, the article says that some of the "special taxes" might go to operating expenses. I thought that's what the profits were for. Do businesses want consumers to pay the operating expenses and provide the profits also?

I see nothing wrong with posting the sales tax rate visibly at the entrance to a store. What really bothers me is going to a store and not knowing the tax until the final tally. This happens especially at self check-outs. It's a simple software change to tally the tax as things ring up. Why isn't that being done?

Randall Barnes 4 years, 5 months ago

they DO NOT have to charge the extra tax but as a buisness the bean counters see dollar signs.is that tax not optional ?

Kontum1972 4 years, 5 months ago

hmmmm------> 1% isnt that what the Hell's Angels have sewn on their vests?

Kontum1972 4 years, 5 months ago

hmmmm------> 1% isnt that what the Hell's Angels have sewn on their vests?

Kontum1972 4 years, 5 months ago

hmmmm------> 1% isnt that what the Hell's Angels have sewn on their vests?

igby 4 years, 5 months ago

The City can't manage it's own business and they continue to think they're the salvation for these businesses,

How much time have they really spent on this stupid idea that will kill the businesses.

nobody1793 4 years, 5 months ago

Almost as much time as they spent developing Lawrence's own currency. Special taxes won't apply to items purchased with "real dollars" right?

just_another_bozo_on_this_bus 4 years, 5 months ago

"Real Dollars" weren't developed by the city, and the city never had anything to do with it.

Too bad it never fully caught on.

puddleglum 4 years, 5 months ago

So the additional 3% goes back to the developers so reimburse them for building the buildings in the first place.....what happens once the developers are repaid? will the tax settle back down to whatever everyone else is charging, or will they continue to charge the tax and pocket all of it? someone, anyone-please let me know if this addressed at all.

CLARKKENT 4 years, 5 months ago

PLEASE HAVE THE BUSINESS POST A SIGN. THERE IS NO REASON FOR US TO HAVE TO PAY AN EXTRA 1 TO 2 PERCENT TO THE PRICES OF OUR GOOD AND SERVICES.

I CANNOT BELIEVE THAT CVS WOULD EVEN BUILD IN SUCH AN EXPENSIVE PLACE. WE REALLY NEED A LOWE'S HERE IN LAWRENCE, BUT IF THEY CHARGE THE EXTRA TAX, I WILL NEVER SET FOOT IN THE STORE. IF THEY DO NOT, THIS WILL BE A REALLY NICE ADDITION TO LAWRENCE. WILL MAKE THE OTHER BIG LUMBER BOX STORE TRAIN THEIR EMPLOYEES.

collared_greens 4 years, 5 months ago

So how many of you drive to KC to shop at Oak Park and the Legends and didn't know you were being taxed extra?

sherbert 4 years, 5 months ago

I think we'd like to know though. If you're purchasing a high dollar electronic or other expensive item from a store at the Legends, you might want to know about the additional tax, it could add up.

collared_greens 4 years, 5 months ago

I agree, but there are no signs at the Legends or Oak Park or anywhere else in KS.

Richard Heckler 4 years, 5 months ago

The primary concern of the real estate executives, the Chamber and the two commissioners that oppose transparency is that commercial building may slow down. It's all about our largest, biggest spending and somewhat corrupt special interest group.

There is no basis for their concerns that business will not locate here. Lawrence is not this hot dog retail shopping choice for several reasons. Lawrence is surrounded by retail choices galore.

AND there are only so many retail dollars available in Lawrence, Kansas. Our largest, biggest spending and somewhat corrupt special interest group pretend that Lawrence can compete with Legends,Olathe,JOCO/KCMO Metro and Topeka. That is simply irresponsible business logic. This irresponsible business logic creates a heavy tax load on local residents.

Economic displacement is the end result = no economic growth = unfriendly to business.

Richard Heckler 4 years, 5 months ago

Meet irresponsible business logic: = Flooded retail market

By Kim McClure

July 24, 2009

To the editor:

The July 14 editorial asks, “What’s downtown going to look like five, 10 or 15 years from now?” The answer can be known, and the picture is not pretty.

Lawrence has enough spending to support about 4.1 million square feet of retail space, but the City Commission permitted developers to expand the supply to over 5.5 million square feet.

Lawrence has too much retail space chasing too few vendors, which means that many stores go empty, especially in the older shopping centers like downtown.

The surplus development has stalled redevelopment plans downtown and has pushed the vacancy rates so high that disinvestment and blight now threaten. Investment, both public and private, is wasted. The taxpayers’ $8 million parking garage stands largely empty. The Hobbs-Taylor building and the 600 block of Massachusetts should be the top performing spaces in the community, but they have significant vacancies.

The recession has contributed to the problem, but had we properly managed our growth we would be much better off.

The developers’ short-term gain is now our long-term loss. Managed growth would have prevented much of the problem and would have protected and enhanced our downtown.

It will take many, many years to absorb this surplus space and, until this happens, it will be hard for downtown to compete. We can only look forward to many years of high vacancy and disinvestment. We need a City Commission that knows how to pace the growth of supply so as to protect our unique downtown.

McClure is from Lawrence
http://www2.ljworld.com/news/2009/jul/24/retail-space/?letters_to_editor

Basic findings and Basic strategy: http://www2.ljworld.com/news/2009/jul/24/retail-space/?letters_to_editor

Richard Heckler 4 years, 5 months ago

About legends : FYI

David Cay Johnston then boggled the crowd with a blunt assertion: "We pay billions of dollars in taxes that never get to the government." Much of the sales tax we pay at big box stores and shopping centers is diverted to the large companies that own the stores. It's just one of the many swindles these chains have learned to perpetrate against city and county governments. This is so effective that the Cabela family, which owns a chain of big-box sporting goods stores, receives 137% of its profits from taxpayer subsidies. If they couldn't work this scam, they wouldn't be in business at all."

Legends receives a ton a business from Lawrence residents as does Oak Park Mall. They also provide a ton of choices and lower prices.

Then again Weavers home furnishings is quite competitive and stocks a fair amount of quality merchandise. I find Brown's Shoe Fit is a good shopping experience.

Buying used and/or antique home furnishings is usually a good buying experience and supports recycling.

Zachary Stoltenberg 4 years, 5 months ago

Shops at weavers and browns, proof positive Merril is over 60. BTW Browns closed over a year ago... Probably too busy copy and pasting to notice.

Centerville 4 years, 5 months ago

I love the idea of a sign in every store, stating the sales tax rate and listing the phone number and email address of the local state rep and senator who voted for it.

cummingshawk 4 years, 5 months ago

People, please stop fighting the "CITIZENS are IDIOTS and DUPES" tax/surcharge/extraprofit, or you personally will force a company to not develop an empty lot and leave it as green space. Remember, expansion and growth will increase our city's tax base, after the developers get their cut, and we can have more bars downtown and shop merrily on the outskirts of out fair city. (Is the Legends close enough to be included in our outskirt area?)

Richard Payton 4 years, 5 months ago

Would hookers have to post a tax sign on their front door? What about drug dealers posting their sales tax info on their front door? Display your tax drug stamp? Post gasoline tax rate on the short bus and the City transit?

formerlyanonymous 4 years, 5 months ago

I've seen tax disclosure signs as simple as an 8.5 x 11 piece of paper tacked to the wall behind the cash register. A Panera off of I-70 in Missouri didn't even bother to laminate theirs. Other businesses I've seen have purchased cheapie frames for their certificates from a big box store. There doesn't need to be a huge cost involved in ordering a custom sign.

Trust comes from transparency. Not everyone subscribes to the paper or would think to check the city's website to learn where the special taxation districts are located. If the city is going to authorize special tax districts, they need to disclose it in a way that the average citizen is going to be made aware.

I'm sure that businesses will fight this tooth and nail. It's in their incentive to do so. Either consumers will like their products and the convenience of the location and shop there or they won't. Either way, businesses should be examining the issue in their business plans and stop whining to potential future customers.

Richard Heckler 4 years, 5 months ago

America Is Over Stored

This decade's building frenzy produced a bumper crop of new retail space. But the occupants haven't materialized.

The carnage in retail hasn't been this bad since an anarchist bombed Chicago's Haymarket Square in 1886. In January, Liz Claiborne said it would shutter 54 Sigrid Olsen stores by mid-2008; Ann Taylor announced that 117 of its 921 stores would be closed over the next three years, and Talbots axed the Talbots Men's and Talbots Kids concepts and 22 Talbots stores. (Those muffled screams you hear are Connecticut preppies trying to suppress their rage.) Even Starbucks has scaled back its yearlong saturation-bombing campaign.

Blame that exhausted marathon runner, the American consumer. Fueled by cheap credit instead of PowerGel, she looked great at Mile 16, but bonked at Mile 23 and is now crawling to the finish line. Sales fell in December, putting the cap on a miserable Christmas season. Last week the government reported that retail sales rose 3.9 percent between January 2007 and January 2008.

But back out inflation and sales of gasoline, and retail sales fell in real terms in the past year. Clearly, demand is down.

And supply is up. This decade's building frenzy produced a bumper crop of new retail space—from McStrip malls built near new McMansions, to hip new boutiques in the ground floors of hip new Miami condo buildings. But as is the case with those McMansions and condos, the occupants for new retail space haven't materialized.

In the fourth quarter of 2007, the national retail-vacancy rate rose for the 11th straight quarter to 7.5 percent—the highest level since 1996, according to research firm Reis, Inc.

With new projects coming online—34 million square feet of retail space will be completed in 2008—the rate is expected to spike further to 8 percent. In the parlance of the trade, many chains are simply over-stored.

Con't http://www.newsweek.com/id/112762

ama 4 years, 5 months ago

I also oppose allowing the CID businesses to be anonymous, whether it is by not requiring a sign or requiring all businesses to have a sign. The effect is the same. The commissioners are concerned about singling out the special CID businesses. I find that ironic. The Lawrence Chamber of Commerce and the Lawrence City Commission did not join other municipalities who supported a 1% tax increase for the public good. Perhaps, like the Kansas Chamber of Commerce, these entities opposed encouraging the populace to eat from the public trough, even though jobs and benefits were being lost statewide. It is apparently okay for private interests to feed from the public trough. If a business has the gall in this economic climate to ask for and receive an additional 2% burden on the tax-paying public, then it should be forced to identify itself. The "scarlet letter" is well deserved.

dubstep 4 years, 5 months ago

Merril, I'm getting VERY tired of you cutting and pasting the same articles over and over. I think anyone who reads the articles about city hall has seen them already, so.... rest assured you can stop at any time.

jafs 4 years, 5 months ago

Just skip the posts, what's the problem?

TopJayhawk 4 years, 5 months ago

Puddleglum. This is nothing like the Turnpike. another straw-man from you. The Turnpike fees are not hidden. If the Turnpike did not charge for usage, the state taxpayers would have to pay to fix it.
In fact this is the exact opposite of the turnpike.

TopJayhawk 4 years, 5 months ago

Come on over to Topeka to shop. We don't play those kind of good ol' boy games here like you do in Lawrence.

TopJayhawk 4 years, 5 months ago

Charge students an additional tax? KU is the only thing that keeps your silly town afloat.
But go ahead and bite the hand that feeds you.
You guys can be so myopic.

Mr_B9 4 years, 5 months ago

There are enough businesses in town that do not charge the additional tax. These are the businesses in my opinion that we should support. They are deserving. If the developer or business cannot put in their businesses without the additional tax then they should not build. By the way, if the city, developers and businesses continue raping consumers of their tax dollars then the signs need to be at least 2'x2' so as we drive up we can just keep on going. Did_I_say_that has the right idea for signage. If you want transparency then lead with transparency and businesses not charging the additional tax should not need to post a sign. Whatever idiot thinks this is right is just confusing the consumer even more.

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