photo by: Richard Gwin

Vegetables are pictured at Dillons grocery store, 1740 Massachusetts St., in this file photo from August 2012.

Even when the state’s 6.5% sales tax on groceries eventually ramps down to zero, Lawrence shoppers will still be paying close to 3% in sales taxes on groceries.

The overwhelming majority of Kansas cities and counties — Lawrence and Douglas County included — charge local sales tax in addition to the state sales tax, and state lawmakers ensured that would not change. The recently passed changes not only don’t affect local sales taxes on groceries, but also prohibit local governments from reducing or eliminating their local sales taxes on groceries.

League of Kansas Municipalities Executive Director Erik Sartorius said for some Kansas communities, the grocery store is the primary or sole business where sales tax is charged, and so many communities did not want to see the state mandate a reduction or elimination in local sales taxes on groceries. As far as what authority local governments have to modify their own sales tax rates for groceries, Sartorius said the legislation continues to disallow local governments from reducing or eliminating those charges.

“What the Legislature has done is set the general rule that governs how the state sales tax is to occur, and if they had done nothing else, then the local sales tax on groceries would have gone away,” Sartorius said. “So what they did was they put a provision in another section specifically saying that local sales tax does apply to food and food ingredients.”

Sartorius said if the legislation had instead said local governments may choose to apply local sales tax to food and food ingredients, then there would have been a local option to make changes.

The total sales tax rate in Lawrence is generally 9.3%, but is 10.3% within three special taxing districts. That rate consists of the 6.5% state sales tax, the 1.55% city sales tax, and the 1.25% county sales tax, which the city also gets a portion of, according to the city’s website. Of the city’s portion, 1% supports general operations and the other 0.55% is a special sales tax supporting infrastructure, Lawrence public transit and affordable housing.

The state measure cuts the 6.5% state sales tax on groceries to 4% on Jan. 1, 2023, as the Associated Press reported. After that, scheduled reductions would take it to 2% in 2024 and zero by Jan. 1, 2025. Only 13 states levy sales taxes on groceries. Kansas’ 6.5% tax is the second highest in the nation, trailing only Mississippi’s 7% rate.

Once the state sales tax is eliminated, Lawrence residents will generally still pay 2.8% sales tax on their groceries. So far, there has been no push by elected leaders to change that.

Though local leaders have voiced support for eliminating state sales tax on groceries, they’ve stopped short of pushing for an elimination of the local sales tax on groceries. The Lawrence City Commission’s 2022 legislative priorities state that “The City does support efforts to reduce the burden of the state sales tax on groceries and on feminine hygiene products,” but do not speak to local sales taxes.

The Douglas County Food System Plan does speak directly to the grocery sales tax, though with a caveat, as the Journal-World previously reported. One of the plan’s policy goals is to “reduce and eliminate the sales tax on groceries,” including the local sales tax. The plan, which relied on local focus groups and community forums, was adopted in summer 2017 and is incorporated into the current comprehensive plan for the city and county. However, the plan states that any local action to remove or reduce sales tax on food must identify an alternative revenue stream to replace any potential loss to local governments “in order to ensure continued execution of essential services and existing financial commitments.”

According to the city’s year-end sales tax report for 2021, “food and beverage store” purchases made up $3.54 million of the city’s $27.1 million in total sales tax collections, or 13% of sales tax collections. Finance Director Jeremy Willmoth said that while groceries likely made up the majority of that category, it also includes liquor store sales, and because of how those sales are categorized, the city does not have an easy way to break down how much comes from groceries specifically. Sales taxes, meanwhile, are only a portion of the city’s overall revenue, with the $3.54 million collected in “food and beverage” sales taxes representing about 1% of the city’s approximately $296.44 million in revenue in 2021.