Food sales tax adds up
The increase in the statewide sales tax may not add enough cost to a weekly grocery purchase to justify driving out of state. But the tax increase will add up over a year’s time and could strain the household budgets of struggling Kansas families.
What’s particularly frustrating is that Gov. Sam Brownback and GOP lawmakers raised the sales tax, which hits lower- and middle-income Kansans the hardest, to help pay for tax cuts and exemptions for the wealthy.
Effective Wednesday, the statewide sales tax in Kansas increased from 6.15 to 6.5 percent. Counting local sales taxes (but not extra taxes in certain community improvement districts), area residents now pay 7.5 percent in Wichita, Maize, Valley Center and Park City; 8 percent in Derby; 8.5 percent in Newton, Haysville and Goddard; 8.75 percent in Augusta; and 9 percent in Wellington. Some other Kansas cities’ rates are even higher.
Unlike most states, Kansas charges the full sales tax rate on food purchases. In fact, only Mississippi has a higher statewide sales tax on food (7 percent), though very few communities in Mississippi have local sales taxes, so its total tax rate is less than what Kansans pay.
But unless residents live very near a border town, they are unlikely to save much, if any, money buying groceries in another state, after subtracting the driving costs.
The Eagle reported Sunday that a person who bought $133.96 in food and $98.83 in non-food supplies (such as paper towels) at a grocery store in Wichita would pay $17.57 in sales tax. Shoppers in Kansas City, Mo., would pay $15.42 in sales tax, while those in Fairbury, Neb., would pay $7.41.
Still, the tax difference can be substantial over a year’s worth of purchases. For example, buying groceries in Kansas City, Kan., costs about $300 a year more than buying them in Kansas City, Mo.
Brownback and the Legislature raised the sales tax rate to help fill a large revenue shortfall created by the 2012 state income tax cuts, which included eliminating income taxes on about 330,000 owners of limited liability companies and Subchapter S corporations. Though a number of lawmakers argued this past session that the business exemption was unfair, Brownback threatened to veto any change to the law.
As a result, the tax burden shifted even more to lower-income Kansans. In fact, the left-leaning Institute on Taxation and Economic Policy calculated that the bottom 40 percent of Kansans are paying more in taxes now than they did before the 2012 tax cuts.
To their credit, lawmakers seriously considered lowering the sales tax on food (which can only be done at the state level). The Senate twice approved amendments to reduce the tax on food, but the final tax bill didn’t include any reduction.
Some lawmakers pledged to push the issue again next year, but the state is facing more budget problems, making that difficult to afford.
In the meantime, the attitude of Brownback and many lawmakers toward struggling families seems to be: Let them eat cake – and pay sales tax on it.
For the editorial board, Phillip Brownlee
This story was originally published June 30, 2015 at 7:07 PM with the headline "Food sales tax adds up."