Kansas Struggles with Streamlined Tax

Published January 1, 2004

In November 2003, a delegation of eight Kansas legislators attended the Streamlined Sales Tax System’s Scottsdale, Arizona meeting seeking help to correct the mess a new “streamlined” sales tax law and its destination sourcing provisions had created in Kansas. Some Kansas legislators are now discussing taking Kansas out of this multi-state compact.

The Kansas delegation was seeking areas of flexibility since the destination sourcing provisions of the streamlined sales tax have created havoc among many Kansas retailers. That havoc is now beginning to affect cities and counties dependent on sales tax revenues.

When Kansas House Speaker Doug Mays (R-Topeka) spoke and sought flexibility on implementing the destination sourcing provision of the streamline law, he received a hostile reception from the sizable audience of state tax agencies. When the Kansas delegation brought up furniture stores that deliver, the opposition was even more hostile. “We became pariahs after we spoke,” Mays said.

Another delegation member, Representative Steve Brunk (R-Wichita), a small businessman, went even further and said this law should be repealed. Brunk was one of only 31 legislators voting against this bill on the last day of the regular 2003 Kansas legislative session. Brunk wants the place of origin sales tax restored and complained that the streamlined sales tax “could be the straw that breaks the camel’s back” for many retailers.

The 2004 Kansas legislature will be exploring all its options when its session begins in January. There is a tremendous amount of confusion among Kansas retailers that is further hurting a stagnant state economy. Neighboring states like Colorado are beginning to take advantage of Kansas’ mistake. Colorado’s Governor Bill Owens proudly boasts that the streamlined tax nonsense will never occur there.

Repealing this law is likely to be one of the first items considered by the 2004 Kansas legislature, but there are enough Democrats in the Kansas house to defend a gubernatorial veto. If the new law is not repealed, the Kansas legislature and Governor Sebelius will have sent a clear message that Kansas is hostile to small business in general and retailers in particular.

Karl Peterjohn is executive director of the Kansas Taxpayers Network.