ORIGINALLY WRITTEN FREE PRESS STAFF
Did you know?
— The base sales-tax rate in Kansas is 5.3 percent.
— Marion County currently adds a 1 percent tax to that base.
— Two communities in Marion County add a local sales tax: Hillsboro, 1 percent; Marion, 0.75 percent. Hillsboro uses half for streets and other capital improvements; the other half will pay for the aquatic center. Marion uses its sale tax for economic development, including the creation of an industrial park,
— In order to collect sales tax on such things as catalog and Internet purchases, a “destination-based” rule took effect in Kansas on July 1, 2003. It states the rate of sales tax due will be the rate in effect where the customer takes delivery/possession of the purchased item. Certain items, including motor vehicles, are excepted out of the rule; the sale tax for those exceptions is “origin based” (sourced to the retailer’s business location).
— Every 1 percent of sales tax adds $250 to the purchase of a $25,000 car.
— Hillsboro auto dealerships generate between $13 million and $16 million in taxable sales each year, according to sources in the field.
— Farm equipment is exempt from sales tax.
— The highest sales-tax rate for a Kansas county is 2 percent. Four counties among 105 currently charge that rate: Cheyenne, Republic, Sedgwick and Wichita.
— Neodesha has the highest combined sales tax rate of any community in Kansas at 8.3%. Only three other communities charge 8% or more: De Soto (8.15 in Johnson Co., 8.05 in Leavenworth Co.), Wamego (8.05) and Yates Center (8.05).
Sales tax survey
Following are the sales-tax rates for a sampling of communities in this market area.
El Dorado 6.30
* Harvey County voters will vote April 4 on additional 1 percent county sales tax..
Sales tax and car purchases
In a nutshell: Regardless where you buy a car in Kansas, your total sales-tax bill will never be less than what you would pay if you bought it where you live.
Scenario A: Buyer Bob, the out-of-county prospect.
When Buyer Bob, who lives in *Harvey County, buys a $25,000 car from a dealership in Hillsboro, he will pay $1,825 in sales tax, based on Hillsboro’s current combined rate (7.3%).
If Buyer Bob purchases the car for the same price in Newton (the combined rate for all of Harvey County is 6.3%), he would pay $1,575 in sales tax.
Bottom line: Purchasing the car in Hillsboro would cost Buyer Bob $250 more out of pocket than if he bought it for the same price in Newton.
* * *
When Buyer Bob purchases that car in Augusta, he will pay $1,450 in sales tax at the dealership, based on Augusta’s combined rate (5.8%). Then, when he registers the vehicle in his county of residence (Harvey), he will pay the county treasurer an additional $125 in sales tax-the difference between the Augusta rate and the Harvey County rate.
Bottom line: No out-of-pocket gain or loss to Buyer Bob for buying in Augusta.
* Chosen for the sake of simplicity. All communities in Harvey County have the same sales-tax rate (currently 6.3%).