Archive for Wednesday, November 24, 2004

State considers change in taxing used-car sales

November 24, 2004

It was just another Friday for Leavenworth County Treasurer's Office employee Cindy Henry. The end of the week, the start of the weekend, and an angry county resident in to complain about an unexpectedly high sales tax charge on a used-car purchase.

The complaint was the result of a state law in effect since July that changed the way sales tax on used cars is calculated.

"She brought in pictures and everything," Henry said. "All treasurers' offices across the state have been affected by this law because we're the ones who have to enforce it. People don't like it because they're having to pay sales tax determined by the state and not the actual price they paid for it."

A 2003 audit found the state was missing out on revenue because some used-car transactions were being fraudulently reported. In some cases, a person would buy a car from another individual, and the purchaser would report to the state a lower price than the one actually paid in order to avoid paying full sales tax.

This year, the Legislature passed a law that has this effect: If you buy a car from an individual and the price is lower than value determined by the state, you will pay sales tax on the higher valuation.

Leavenworth County resident Tammy Tavano bought a truck after the law took effect and found the sales tax was about $100 more than what she would have paid if she'd been taxed on what she actually paid for the vehicle.

Tavano, like many angry Kansans, said she had a problem with the new law.

The Legislature is listening. On Nov. 15 a House-Senate committee voted to recommend a repeal when the 2005 session begins.

State Rep. Kenny Wilk, R-Lansing, said he agreed the law should be repealed.

"There's been tremendous dissatisfaction across the state with the policy," Wilk said. "I've had a number of phone calls. I believe it's safe to say every legislator has had a lot of phone calls."

Wilk said the question was how to make sales tax on used cars fair to the buyer and the state. The law that was passed, he said, in retrospect was a bad attempt to deal with the issue.

Wilk said even his brother was affected by the law. He bought a car from his daughter and "got zinged an extra $250" in sales tax, Wilk said. "He was very unhappy."

Comments

Use the comment form below to begin a discussion about this content.

Commenting has been disabled for this item.