At the bustling intersection of 135th Street and Metcalf in Overland Park, shoppers looking to save on food need only walk across the street.
Go to Sprouts Farmers Market on the South side of 135th and you will pay 8.1% sales tax on food. But for the chicken coop on the north side of the road the tax is only 6.6%.
As Kansas’ sales tax rate on food dropped from 6.5% to 4% on Jan. 1, some shoppers were surprised to see that the rates they’re paying don’t match the savings they expected . While some stores struggled in the early days to adjust their rates, the lingering confusion is now rooted in how sales tax rates can sometimes fluctuate block by block in ways many residents are unlikely to be aware of.
A number of special tax districts can add to your bill depending on where you’re shopping. When you go shopping, you are charged state, provincial and city sales taxes, which add up to produce the total sales tax rate. However, in stores that fall under a special tax district, which includes community improvement districts, you’ll pay even more.
The Sprouts Farmers Market on 135th Street is located in Overland Park’s Corbin Park Community Improvement District, a retail commercial area just west of the Museum at Prairiefire. The chicken coop isn’t in a special district, so the food is taxed at the standard Kansas, Johnson County, and Overland Park rates, totaling 6.6 percent.
“I had no idea. I mean… I thought all of Overland Park was a tax rate. To have something blow up in different areas of Overland Park, it just seems ridiculous,” said Eli Pfefer, a retired Overland resident. Park.
When Pfefer bought $17.17 worth of cosmic crisp apples and Roma tomatoes from Sprouts on Friday, he paid $1.39 in tax, a combined tax rate of 8.09%. Pfefer, believing the rate at Overland Park to be 6.6% citywide, contacted The Star and provided his receipt.
The total food tax rate within the Corbin Park Community Improvement District, where an additional 1.5% tax is added, is reportedly 8.1%, according to rates released this month by the Kansas Department of Revenue.
In Corbin Park and other CIDs, an additional sales tax is assessed, with revenues helping developers with project costs, including infrastructure, design, engineering, and other construction-related expenses. Corbin Park is essentially an open-air mall that includes a JCPenney, Von Maur and other stores. According to its website, the area remains under development.
Pfefer was taxed the right amount, even though he initially thought something was wrong.
“I watch the news, I look up stuff online,” Pfefer said. “I too prefer facts and was unaware of these things.”
Many tax rates
Kansas has more than 1,000 distinct sales tax areas, the sum of every county, city, and special tax district in the state. Overland Park alone has 25 such areas, ranging from the Prairiefire development to the corporate headquarters of Jack Stack Barbecue.
Johnson County’s online mapping tool shows how these special tax districts are scattered throughout the county and how much they can raise sales tax rates, even setting food aside. Shop a few areas around AMC Dine-In 28 near I-35 and 119th Street and you’ll pay close to 10.5% sales tax on non-food items.
This map shows community improvement districts and other public improvement funding areas within Johnson County. Some of these districts add an extra sales tax to purchases.
The overall rate of sales tax you would have to pay on food on the Kansas side of the Kansas City metro area is listed below, using information from the Kansas Department of Revenue. Data does not include special tax districts.
6.475% in Prairie Village
6.6% in Leawood
6.6% at Overland Park
6.625% in Kansas City
6.75% in the Wyandotte and Leavenworth counties portions of Bonner Springs
6.85% in Lenexa
6.975% to Merriam
6.9755 in Olate
6.975% at Roeland Park
6.975% in Westwood
7.1% in Shawnee
7.225% in the Johnson County portion of Bonner Springs
7.225% on mission
7.475% in the fairway
Tax rate information for each county, city, and special tax district in the state, along with the location of the districts, is published by the Kansas Department of Revenue here.
Sources of confusion
State Representative Mari-Lynn Poskin, a Democrat from Leawood, said she has heard from several voters who are confused about the taxes on food.
“I think it was surprising to learn that you could pay more at one store than at another store in Johnson County,” she said. “I hope this also sheds some light on the fact that we haven’t repealed the state food sales tax 100 percent.”
Poskin said requiring retailers to cut the source of the receipt tax could be helpful for transparency but it would also be costly. Instead, he said the state’s goal should be to lower the rate to begin with.
Jon McCormick, president and CEO of the Retail Grocers Association, said the confusion among consumers about tax rates involves several factors.
The first is the term “groceries,” which shouldn’t be confused with food, he said. The Kansas rate cut applies only to food: fruits, vegetables, cuts of meat, and the like. It doesn’t include non-food items that people often buy at grocery stores, such as toilet paper and pet food.
Furthermore, the reduction does not apply to prepared food, i.e. food sold hot or sold with cutlery. If your grocery store has a coffee shop or cafeteria where you’re buying meals to eat in or go, you’re probably paying sales tax on those items. The prepared food exception also means that meals in restaurants are still taxed at the full rate.
“If you get a hot takeout from the deli and they give you utensils and a napkin, it’s taxed at a higher rate,” McCormick said.
Plus, the many tax rates add to the confusion, McCormick said, because the reduction only applies to the state rate. “So that’s the next confusing thing,” she said.
Local taxes still apply
Kansas Governor Laura Kelly, a Democrat, pushed the Republican-controlled legislature to immediately eliminate the statewide food sales tax. Under the current law, passed last spring, the state food sales tax is being phased out.
The first rate reduction on January 1st was the first. The tax will drop to 2% in January 2024 and be completely eliminated by 2025.
But whether lawmakers pass a statewide elimination of the rate this spring or it’s phased out over time, the law doesn’t affect local taxes on food sales, meaning food won’t be truly tax-free. For example, Pfefer and other shoppers will still pay a 4.1 percent tax on food at Sprouts on 135th Street in Overland Park after the state food sales tax is completely eliminated.
Local governments could come under pressure to lower or eliminate their own food taxes, but McCormick said he is unaware of any city or county that has followed the state’s lead so far.
Much of Johnson County’s sales tax rate is devoted to specific purposes, including public safety and rainwater.
Johnson County Commission Chair Mike Kelly said that, in his understanding, if the commissioners wanted to carve out food from the county’s sales tax, it would have to go to a countywide vote.
Kelly said he understands CIDs and other tax districts, often a parade of acronyms, can seem esoteric. While cities often lead the charge on these districts, she acknowledged that the county plays a small role.
But districts are sometimes needed to attract meaningful development, he said.
“It’s a balance, like anything else,” Kelly said.
Even if local rates remain, bringing the state rate to zero remains important because of how much prices have risen due to inflation, McCormick said, pointing to the cost of eggs, milk and bread.
“Kansas families need this,” McCormick said. “Spend has increased much more than many other things.”
Katie Bernard of The Star contributed to the reporting