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October 21, 2014

Wichita senators forming plan to eliminate sales tax on food

Kelsey Ryan, The Wichita Eagle

Even though it may be too late to offset costs for Wichitans if the 1-cent sales tax passes on Nov. 4, two state senators say they want to introduce a plan in the Legislature to eliminate sales tax on food. Kansas is one of a handful of states that tax groceries or food for preparation at home.

 

“Every Kansan eats, so lowering sales tax on food is a benefit to every Kansan, whether you’re living off Social Security or a billionaire,” said Sen. Michael O’Donnell, R-Wichita, who is working on the measure with Sen. Oletha Faust-Goudeau, D-Wichita.

 

O’Donnell said he worked on a similar proposal on the tax code during the 2013 session, but he said that effort was rejected by the House.

 

A few years ago the state had a tax refund on food sales. In 2013, Kansas instead began providing a food sales tax credit for low-income, elderly and disabled people on their income taxes, according to Jeannine Koranda, the Department of Revenue’s public information officer.

 

Not all of the income tax returns for that first year have been processed, Koranda said, so the state does not have data on how many people claimed the tax credit. City tax Wichitans currently pay 6.15 percent in state sales tax and 1 percent in county sales tax. The proposed city sales tax would bring that total up to 8.15 percent for five years, or until $400 million is collected.

 

The money would go toward water supply ($250¬ million), street maintenance and repair ($27.8 million), transit ($39.8 million) and job development ($80 million).

 

The 1-cent-on-the-dollar city sales tax would have the same exemptions that the state has on its sales tax.

 

According to the Kansas Department of Revenue, some items that are exempt from sales tax include food-stamp purchases; Women, Infants, and Children (WIC) program purchases; prescription drugs and insulin; orthopedic appliances; prosthetic devices and mobility equipment; some aircraft sales and parts; and farm machinery and equipment, among other things.

 

Mayor Carl Brewer said he thinks any assistance from the state would be helpful, but he’s not holding his breath that a state statute eliminating sales tax on food will pass any time soon.

 

“A lot of ideas are presented at the statehouse, but until the Legislature actually meets we don’t put a whole lot of hope into it until we actually see it,” Brewer said. “They’ve had some (budgetary) challenges, but at least they’re thinking about it.”

 

State revenue O’Donnell said that he is working with the Legislative Research Department to look at slowly reducing the sales tax on food over several years.

“I think everyone is cognizant that we do not have the luxury right now of eliminating more taxes in Kansas because of the budget projections,” he said.

“Nothing is going to happen overnight. … We can’t just completely eliminate it tomorrow because it would have strong reverberations on incoming taxes, but we could wean us off of it.”

 

Kansas is currently projected to have a $260 million deficit by the end of June 2016.

 

Groceries make up about 15 percent of total state sales tax collections, according to the Kansas Revenue Department.

 

The department estimates that about $392.5 million is generated by sales tax on groceries and that about $325.5 million of that goes toward the state’s general fund.

 

Reach Kelsey Ryan at 316-269-6752 or kryan@wichitaeagle.com. Follow her on Twitter: @kelsey_ryan.

 

 

Paid for by Michael O'Donnell for Sedgwick County, Linda Kizzire, Treasurer.