Bill proposes sales-tax holiday
Topeka Attention Kansas shoppers.
The state sales tax would be removed from clothing, computers and school supplies for several days this summer under legislation recommended Tuesday by several lawmakers and retailers.
The idea is to give parents a tax break as they shop for back-to-school items, and pump up sales at Kansas stores that have to compete with a similar tax holiday in Missouri.
"This is the ongoing chess match with Missouri," said Rep. Kenny Wilk, R-Lansing, chairman of the House Taxation Committee.
The committee took no action on the bill but plans to after getting more information on the effects of Missouri's sales tax holiday on stores in Kansas.
Mike Davis, manager of a J.C. Penney Co. Inc. store at Oak Park Mall in Overland Park, said the shift in sales was dramatic during the sales tax holiday in Missouri.
"Our consumers will get in their cars to travel out of state to get a lower net price," he said.
Budget experts, however, said the measure would short the state treasury about $3.7 million per year in lost taxes.
Gov. Kathleen Sebelius' administration said a provision that would allow cities and counties the option of waiving their sales taxes during the holiday would put the state out of compliance with an agreement with 18 other states. Under the multistate agreement, the tax holiday must apply to local sales taxes also, the Department of Revenue said.
But Don Moler, executive director of the League of Kansas Municipalities, said if the bill is changed to require that cities participate in the sales tax holiday, cities would oppose it.