KU Statehouse News Service
A new bill could lower the cost of groceries and other food products across the state of Kansas, following a hearing at the House Taxation Committee.
House Bill 2261 would lower the current food sales tax from 6.5 percent to 5.5 percent. This change would decrease state revenues by $59.8 million in fiscal year 2020.
“It’s time to give working class Kansans the break they have earned and deserve,” Rep. Tim Hodge (D-Newton) said. “This will help everyone, not just a select few.”
Kansas is one of only 14 states to tax food with the second highest food tax rate in the country.
“It’s the most regressive tax that hits working Kansans the hardest,” Hodge said.
As it is now, residents in cities such as Lawrence are paying 9.05 percent (6.5 percent state sales tax, 1 percent Douglas County tax, and a 1.55 percent Lawrence tax). On a $100 grocery store purchase, this equates to $9.05 in taxes, which would lower to $8.05, if HB 2261 passes.
While neighboring states such as Nebraska and Colorado have a zero percent food sales tax, Missouri operates at a 1.2 percent food sales tax. Border towns such as Oberlin and Moran struggle to keep the business in Kansas.
“We’re bordering right on Nebraska and Colorado so the food sales tax really hits our area very hard,” said Oberlin City Administrator Halley Roberson.
Roberson explained how the county’s one grocery store loses customers to stores across state lines where they can save money by avoiding the higher food tax rate.
“So, it makes it difficult for him [the grocery store owner] to even participate,” Roberson said. “The idea of him being able to compete is not even on the table.”
Rachel Henderson, assistant manager at The Marmaton Market in Moran reflected the same issues of “border hopping” into Missouri to save money on groceries.
Several other groups supported the bill due to the potential health benefits for children including KC Healthy Kids and the Kansas National Education Association.
“Obesity is greatly impacted by food policy,” said Casey Cordts, pediatric hospitalist at Stormont Vail Hospital. “Currently the most recent statistics put about 40 percent of all adults in the United States classified as obese with a BMI greater than 30 percent.”
Cordts also noted that among adults in Kansas around 31.3 percent classify as obese while 12 percent of adolescents and 13 percent of 2- to 5-year-olds are in the same classification.
“When I talk about my people that are really struggling and counting pennies to that bottom line, if they spend $100 over the course of a month on food, and we give them that 1 percent back, that $1 gives me a chance to say you can increase better nutrition with that,” Cordts said. “That leads to about two cans of canned vegetables or maybe a bag of frozen vegetables.”
The bill applies to any candy prepared with flour, meaning, for example, Twix would qualify for the lower tax rate but M&M’s would not. The Kansas Chamber of Commerce requested that the definition for candy, in context to this bill, be changed.
“It’s essentially more of a concern over compliance and not creating a bifurcated system on different types of candy,” said Eric Stafford, vice president of Government Affairs at the Kansas Chamber of Commerce. “The request that we would have would be to just simply make those changes.”
Other concerns arose from the Kansas Farm Bureau and Kansas Restaurant and Hospitality Association with worries that the bill could pose long-term harm on farmers and restaurant business respectively.
Grant Heiman is a University of Kansas junior from Wichita majoring in journalism.
House taxation committee considers lowering food sales tax