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.