Study Shows Kansas Sales Tax Hurting Rural Grocers

Aug 7, 2015

A group pushing for elimination of the sales tax on groceries in Kansas is touting a new study.

The Wichita State University study shows that even before it was raised last month from 6.15 percent to 6.5 percent, the statewide sales tax was costing rural grocers an average of about $18,000 a year in lost sales.

The study was paid for by KC Healthy Kids, a nonprofit organization pushing to make Kansas the 37th state to eliminate its sales tax on groceries.

Ashley Jones-Wisner, a spokesperson for the group, said ongoing budget problems shouldn’t keep Kansas lawmakers from exempting groceries from the sales tax.

“What we can’t afford to do is keep going down the path that we’re going down right now,” Jones-Wisner said, noting that the study suggests the grocery tax could be one of the reasons Kansas has been slipping in state health rankings.

You can read the full study here:

The study indicates that some consumers may be limiting their purchase of fruits and dairy products due to the high tax rate.

“That’s a key finding in the study,” Jones-Wisner said. “Dairy and fruits are so critical to a healthy diet.”

Of the 14 states that levy sales taxes on groceries, only Kansas and six others charge their full rates. Kansas’ rate is now the highest in the nation.

The WSU study indicates that the high tax rate also is costing jobs in rural areas.

“Workers at rural grocery stores see lower compensation due to the sales tax on groceries and employment at rural groceries is lower than it would otherwise be without the tax,” writes Kenneth Kriz, the WSU professor who conducted the study.

If lawmakers want to improve the economies in smaller communities, Kriz said, they could “consider shifting the burden from a sales tax on groceries to the income tax.”

It’s unlikely that members of the Legislature’s conservative Republican majority will consider that trade-off. They ended the 2015 session — the longest in state history — by passing increases in sales and tobacco taxes to generate revenue lost because of income tax cuts approved in 2012.

Several of the tax increase plans discussed in the final weeks of the session would have lowered but not eliminated the sales tax on groceries. But that feature, intended to make the tax package more attractive to Democrats and moderate Republicans, was dropped from the plan that ultimately passed.

Jim McLean is executive editor of KHI News Service in Topeka, a partner in the Heartland Health Monitor team.