Joni Green Comments on “Community Improvement District Lets Business Impose Sales Tax”

I received a wonderful comment on a previous blog post, Community Improvement District Lets Business Impose Sales Tax for Improvements.

Joni Green sent this comment –

A couple of friends visited a new restaurant located near Central and Oliver. Their ticket reflected an additional “CID” tax of 1%. When they questioned it the server had no explanation. The manager/owner came over and told them is was a “development tax” that helps develop and improve the area, he said the the other restaurants near there were also charging the tax. However, when we checked with them they did not know anything about it. I checked with the State of Kansas Division of Taxation/Revenue and they told me they had not heard of this, but if they were charging an additional tax % it shouldn’t be called out separately, but should be included in their original tax rate. They also told me that we could look up their tax rate by address on the Kansas website. We looked up their address and it said their tax rate was the normal 7.3%. How do we know if a business is legitimately charging a CID tax? And I agree, it’s a weird feeling to pay more tax at one place opposed to another. Doesn’t seem like “good” business to me :/

It would appear as with so many other things, a business can often improve its profits by unethical means. I’m sorry the restaurant treats its customers this way but very pleased that Ms. Green took the time to let me know what had happened.

James Pilant

Community Improvement District Lets Business Impose Sales Tax For Improvements

From KAKE in Wichita, Kansas

Owners of a popular east Wichita shopping center want to make improvements. In turn, they want shoppers to pay more in sales tax.

Eastgate Shopping Center at Kellogg and Rock Road will ask the Wichita City Council to establish a Community Improvement District for the area. Plans call for facade renovations, and parking and store improvements.

The cost for the project will run more than $53 million. Eastgate developers say a one cent sales tax would be in place over a 22 year period to pay for the renovations.

Kansas

A privately owned shopping center can petition the city to impose a tax and give it to them?

Is the private becoming the public? or the public, the private?

Tax money will directly pay for improvements to this shopping center in the form of a sales tax. Is this wise? At what point does a government cease being government of the people and morphs into a subsidiary of private interests offering its citizens up for their business value?

The one thing that I find most ironic is that Kansas is considering cutting its corporate tax rate, but it is okay for a business to apply for and receive a tax increase on the citizens of that same state.

James Pilant