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Archive for Wednesday, August 24, 2011

City commission considering law requiring all special sales tax districts in Lawrence to post signs notifying shoppers of the higher sales tax rates

Cromwell: ‘We need signage, but so does the state’

August 24, 2011

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Lawrence shouldn’t have all the fun when it comes to signs and special sales taxes.

Lawrence city commissioners at their Tuesday meeting directed staff members to draft an ordinance that would require all special sales tax districts in Lawrence to post signs notifying shoppers of the higher sales tax rates.

But the signs shouldn’t stop there, Lawrence leaders said.

“We need signage, but so does the state,” said Mayor Aron Cromwell. “It is unfair to our citizens. That is something we need to put a call out on at the state level.”

The state has more than 40 districts that charge a special sales tax that is over-and-above the common rate charged in their communities. That has created situations where similar merchants on different sides of the street are charging significantly different sales taxes for the same goods.

City commissioners have heard multiple complaints from the public about the special taxes not being transparent enough, but commissioners said they’re not sure Lawrence shoppers understand they’re being hit with special taxes when they shop at many places in Kansas City.

“When you look at the list of places that have these (special taxes), they are a lot of the same places we’re losing sales to,” Cromwell said.

Among the locations that shoppers will pay a special tax — they vary in their amount but can be up to 2 percent — include:

  • In Kansas City, Kan., at numerous locations around the Kansas Speedway and as part of the Village West and Legends developments.
  • In Leawood at various locations along Nall Avenue and 119th Street.
  • In Lenexa at various locations along Quivira Road.
  • In Olathe at various locations along South Renner Road, 119th Street, Blackbob Road, and at locations near the Great Mall of the Great Plains.
  • In Overland Park along parts of Metcalf Avenue, West 135th Street, West 95th Street and along Quivira Road near the Oak Park Mall.

A change in state law requiring all special taxing districts to post signs alerting shoppers to the higher tax would help level the playing field, Cromwell said. But such a change might be tough to come by.

Legislation was introduced last session, said Sen. Tom Holland, D-Baldwin City, that would have required every retailer — regardless of whether they were in a special taxing district — to post a sign stating their sales tax rate. Holland, who supported the legislation, said the bill had momentum in the Senate but struggled in the House.

Rep. Richard Carlson, chair of the House’s taxation committee, said there was concern that the signs could serve as a punishment for businesses who are doing the state’s work by collecting sales taxes. Carlson said not all businesses who are in a special taxing district support the extra taxes. He said some merchants are renters, who have very little ability to protest the special taxing districts. It is property owners who can request the special taxing districts and also can protest against their creation.

“I believe in transparency for the taxpayer, but I also believe in not punishing a retailer,” said Carlson, who said he doesn’t support the idea of special taxing districts to begin with. “We need to find another way.”

The League of Kansas Municipalities — whose leaders lobby at the Statehouse on behalf of cities — also hasn’t been a supporter of the idea of requiring signs to be posted at special taxing districts.

Kimberly Winn, deputy director of the organization, said her group generally believes in letting each city make its own decision about the matter.

Wichita is the only city in the state that has adopted an ordinance that requires signs in the special taxing districts. Merchants there must post at least a 24-inch square sign that reads, “This project made possible by Community Improvement District Financing. For more information go to www.wichita.gov/cid.”

Lawrence City Commissioner Bob Schumm said he envisions Lawrence sign regulation being more specific.

“So what, before you go in the store, you’re going to turn on your computer,” Schumm said of the Wichita sign.

Schumm said he wants a sign that specifically says how much higher the sales tax is in the district than compared to the citywide sales tax rate. He also said he would want the districts to post signs that look similar to parking signs so that motorists can be alerted to the sales tax rate before deciding whether to pull into a merchant’s parking lot.

“I want the signs to be useful to people before they make a decision to shop there,” Schumm said.

Comments

ISlurpy 2 years, 7 months ago

It would be more reasonable to only put signs up on big tourist sights and then let the consumer figure out the tax on the other places they want to go. If someone regularly shops at Legends then i'm pretty sure they don't care about the tax, as apposed to someone who has never been to KC and maybe they care less about the tax rates on a smaller restaurant they go to rather then all of the places Legends has to offer. Now I don't think an insurmountable amount of money should be used to complete this task for businesses everywhere. Just the smaller restaurants around the bigger tourist attractions.

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jafs 2 years, 7 months ago

I think that signs notifying shoppers of any variance from the normal citywide sales tax rate are a very good idea, and should be implemented.

In addition, all businesses should be required to print the sales tax rate they're charging on their receipts.

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usesomesense 2 years, 7 months ago

It should be required to post any variance from the citywide sales tax on every entrance, menu and payment terminal of special sales tax districts if only to prevent anyone from ever considering imposing one ever again. They should be required to disclose the information in any lease and failure to disclose to the tenant would result in the landlord paying the extra tax - not the tenant or consumers. This whole scheme is designed to be deceptive to consumers and tenants and taxpayers.

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gr 2 years, 7 months ago

"He said some merchants are renters, who have very little ability to protest the special taxing districts."

You mean they don't have the same choices as consumers do and not rent there? Maybe rental agreements need to disclose increased taxes.

Because knowing is half the battle.

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clovis_sangrail 2 years, 7 months ago

" Isn't it in the best interests of the city/county/citizens for these kinds of districts to be successful?"

Not necessarily. I hardy think residents near the Oread would agree it was in their best interests, except for maybe the ones who want to be withing walking distance of expensive drinks.

"Isn't that why they are created in the first place?"

No, that is how they are rationalized in the first place. I doubt that Smashburger and the car wash are bringing in any new revenue into the city.

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GovJunkie 2 years, 7 months ago

Why stop there? If you want transparency, go all in... like outside the city limits, plant big signs that list the local sales tax rates, property tax mill levy, parking ticket fees and everything else the government charges for... let the people decide whether they want to come into the city at all... It is absolute nonsense to mandate a sign for each an every cost, taxing district, etc. Might as well create a benefit district and then post a sign, "DON'T SHOP HERE -- YOU WILL PAY HIGHER TAXES..." Isn't it in the best interests of the city/county/citizens for these kinds of districts to be successful? Isn't that why they are created in the first place? Hj

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Lynn731 2 years, 7 months ago

Long overdue! It's about time we know when we are being screwed so we can shop else where. Thank you, Lynn

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consumer1 2 years, 7 months ago

Liberal says, "Who cares? I do not need a sign to decide where I am going to make a purchase."

That is exactly the kind of apathy that allows business' to take unfair advantage of the consumers. Are you still spending your parent's money?

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Liberal 2 years, 7 months ago

Who cares? I do not need a sign to decide where I am going to make a purchase. If retailers think it is such an advantage to save a small percentage than let them advertise the lower cost in their store.

This is the dumbest thing I have ever heard.

Why don't you spend time trying to figure out how to grow companies and keep companies here. Figure out a way to run more efficiently.

Maybe it should be a requirement to post at all stores all of the taxes you have to pay. Maybe we should mandate how much of the price of goods is actually the goods and not fee's, taxes and licensing cost.

I can see it now, a wall of signs informing consumers they have to pay taxes. Brilliant.

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somedude20 2 years, 7 months ago

"Well you hurt my friends, and you hurt my pride, I gotta be a man; I can't let it slide, I am a real American, Fight for the rights of every man, I am a real American, fight for what's right, fight for your life! I am a real American, Fight for the rights of every man, I am a real American, fight for what's right, fight for your life!" http://www.youtube.com/watch?v=GGuhZv...

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ferrislives 2 years, 7 months ago

"City commission considering law requiring all special sales tax districts in Lawrence to post signs notifying shoppers of the higher sales tax rates"

For once I see no issue at all with what Cromwell wants to do. How can anyone have an issue with the Lawrence Commission wanting a way for its consumers to be more informed when spending their hard-earned money?

Next on the agenda, not spending $18+ million on a new library when we're broke? Only in my dreams.

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Kontum1972 2 years, 7 months ago

does this include the strip clubs in our wonderful city?

thats a special business..!

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rtwngr 2 years, 7 months ago

This article is so intellectually disingenuous. The libs never met a tax they didn't like and then they want to turn around and spend money to post signs everywhere. They don't want to give tax breaks to businesses but merrily go along with additional tax levees for business owners to perform site improvement. Then they squawk about a "level" playing field and feel the need to post signs. How about eliminating all of these special taxes. Tell business owners if you want to make improvements, go ahead but fund it yourself.

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usesomesense 2 years, 7 months ago

Oh - and I'm also a local business owner. (Just didn't want anybody to think I'm not pro-business - I just believe people need to work for a living and not exploit others to be successful). I get tired of other business people complaining about taxes and then turning around and sticking their hand out to receive them.

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usesomesense 2 years, 7 months ago

Government should not have the authority to create 'taxes' to pay for what frequently is an 'investment' of taxpayer dollars in a real estate development project. If a developer is improving an area of blight they should offer a property tax break and perhaps on occasion some assistance with the demolition and removal of the blighted structures. It is extremely offensive for taxpayers to foot the bill for necessary infrastructure for a for profit development project - especially when the land being 'improved' is a cornfield (I personally don't find cornfields offensive nor wheat or soybeans or even grass).

Furthermore the 'passthrough' taxes (like the one on 23rd street) that give the extra 1% back to the developer is also ludicrous. I'd love to be able to have a tax that pays me, but it's just not reasonable. Money from taxes shouldn't go to businesses (and I have questioned whether it is even legal to call it a tax if that's where it's going). If the developer wants a return from his tenant's business he can simply put a clause in the lease demanding 1% of their gross sales and see how he does renting the place. Again - it's not the taxpayer's problem. Either accept the responsibility and cost and take the risk of developing your project or don't develop it.

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Sigmund 2 years, 7 months ago

GardenMomma (anonymous) replies… "The entire Legends shopping area is a special taxing district."

Correct, and if you want Lawrence to emulate The Legends then offer CID to every single retailer, but unless it attracts substantial business from outside of Lawrence it will depress local business. None of this picking and choosing based upon political connections, political correctness, or palms greasier than those fries piled high to the sky.

Increasing taxes is NOT the reason for The Legends success. If it were success would be easy as the Lawrence City (There's a tax for that!) Commission knows how to increase taxes. The problem is the more people spend on taxes the less they have to spend depressing retail sales. The reason for The Legends success is because attracts business from a very large geographic area, and there is little in Lawrence that attracts that kind of business.

Nothing proposed for Lawrence has that kind of drawing power and at the end of the day the CID is just a way for the Commission using their power to reward their friends or punish their competition.

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tlr2519 2 years, 7 months ago

It seems to me that a sales tax should be the same within a political boundry. Period.

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Sigmund 2 years, 7 months ago

Every dollar in additional taxes taken form consumers is less discretionary dollars consumers have to spend. For instance, if you take an additional $100,000 in additional CID taxes, that is a $100,000 less consumers have to spend. Additional CID taxes "may" benefit a single retailer, but this kind of corporate welfare that benefits a single retailer has a negative impact on all other businesses in the area by reducing dollar for dollar the discretionary spendable income of consumers in the area.

Honestly, if a 1% or 2% increase in revenues on retail sales from CID's will make or break any particular project then they need to drop out. Or they can put their big boy pants on compete on a level playing field and raise their prices by 1% or 2% like their competition does.

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Sigmund 2 years, 7 months ago

Schumm said he wants a sign that specifically says how much higher the sales tax is in the district than compared to the citywide sales tax rate. He also said he would want the districts to post signs that look similar to parking signs so that motorists can be alerted to the sales tax rate before deciding whether to pull into a merchant’s parking lot.

“I want the signs to be useful to people before they make a decision to shop there,” Schumm said.

Commissioner Schumm I will be looking for the sign at Buffalo Bill's notifying customers of your tax subsidized fire sprinklers. God what a sleaze you are making others declare their tax subsidies while hiding your own!

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bolshavik_vw 2 years, 7 months ago

Wyandotte and Johnson Counties in Kansas have always had higher Sales Tax rates.

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sad_lawrencian 2 years, 7 months ago

.....................or they could just make all business charge the same sales tax. Wouldn't that be nice? And, don't a handful of states have no sales tax at all?

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MacHeath 2 years, 7 months ago

yeah, I paid a whoppin' 9% at Cabelas the other day! Makes that 8.5% citywide sales tax look like beans to me! Of course, I would have had to pay a lot more for the item in Lawrence...and I had a 10% off Cabelas coupon. If I could have found the item in town anyway, which I could not. Dang Schumm, don't go to Cabelas and pay that extra .5%! Looks to me that the whole city of Lawrence is a special tax district. I guess we will have to put up big signs on the interstate! Don't even get me started on property taxes. Who do you think you are kidding, Schumm?

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kantubek 2 years, 7 months ago

Perhaps the Oread can take down some of their wind-torn flags and put up ones that read "TIF"

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