Iola council members were told last Monday sales tax distribution to the city, compared to a year ago, was flat. Several reasons were suggested. The primary one may be that more people are buying merchandise online. That permits them to avoid sales tax, which reduces tax revenue for Iola and sales for local merchants.
Generally speaking, if an online retailer maintains a physical presence in a state that charges a sales tax on most purchases — as Kansas does, as well as Iola and Allen County — then that online retailer must charge sales tax on any items that are sold to customers within the home state. If the retailer operates from out of state, it can skip charging sales tax.
A few downtown Iola stores have closed or will soon. In some cases it has to do with age and retirement; nonetheless, consumers are becoming accustomed to the convenience of buying online from the comfort of home.
We don’t beg for folks to shop at home as a favor to merchants — though it is an enormous one and in an indirect way helps us all because of their community involvement — but it is a very good tactic from the perspective of ongoing service and dealing with people we know, often friends.
“It’s sad to see downtown stores closing in Iola — Humboldt and Moran, too,” said Gary Parker, who farmed before retiring five years ago. “But, it’s happening in big cities, as well.”
He has some thoughts on sales tax and how collections may be done to ensure cities and counties get their fair shares of revenue.
Kansas has a statewide sales tax of 6.5 percent. Iola’s is 1 percent, Allen County’s 1.25 percent, part of which it apportions to incorporated cities based on their population.
Parker’s proposal is for the state legislature to take note of the zip codes of all internet sales and apply the appropriate sales tax to benefit local, county and state.
Legislators at state levels have grappled with the question of how to put established local businesses on a level playing field with online retailers. Parker’s idea is sound. Next is convincing legislators of all 50 states to move forward without being jaundiced by lobbyists who would try to intervene.
The formula is simple enough, just what is needed.
PARKER continues to have farm income from land he owns, which makes him one of about 330,000 small business owners and farmers who essentially pay no state income tax.
Should that exemption be repealed during the 2017 session, he was asked. “Of course it should,” Parker said, raising his voice to give emphasis. “Why shouldn’t we pay (income) taxes?”
He pointed out how devastating the income tax cuts have been for the Kansas economy and the terrific burdens they have been for education and healthcare, not to mention social services and highway repair and construction.
Reps. Kent Thompson and Adam Lusker and Sen. Caryn Tyson should take note of what Parker has to say, along with a multitude of other constituents who have been soured by the governor failing to take blame for the fiscal crisis he has created with the 2012 and 2013 tax cuts.
Brownback’s answer in a press conference this week: “It’d be more constructive if whoever in the Legislature proposes ideas to deal with the budget problems and starts working on it.”
Meanwhile, with a shortfall of about $350 million and growing, Brownback tossed up a red herring at the news conference, suggesting a program he called TeachersKan. It would create scholarships to draw teachers to rural Kansas schools; other initiatives would woo doctors and dentists to underserved rural areas. Brownback failed to mention how such programs would be funded.
Brownback still has yet to admit the trickle-down theory behind his tax cuts hasn’t worked. Instead, he’s content to blame budget problems on low farm and oil prices, or grasp at any other rationalization that happens along.
— Bob Johnson
