By ROD ZOOK
Hutch Post
HUTCHINSON, Kan. — With inflation and a slowdown in shopping sales, tax was lower for both the city of Hutchinson and Reno County in May. That leads to the question of whether the economy is slowing enough to hurt city and county budgets. County Administrator Randy Partington says the lower numbers in May are a little deceiving.
“I believe this is just a one or two month occurrence, this month and probably next month, related to the compensating use tax,” Partington said. “The direct sales tax that came in for the county was $398,000 but we’re still above what we were last year.”
Partington attributes the drop to the decline of compensating use tax, which fell by about $65,000 year-over-year.
“The compensating use tax, the last year at this time, was $72,000,” Partington said. “This time it was around $6,500.”
Still, inflation and the possible slowdown in shopping trends is something the county will be watching in the coming months.
“There’s still concern with inflation and gas prices and everything else, people won’t be spending as much and sales tax won’t be increasing as it has the past couple of years,” Partington said. “But just looking at the sales tax portion, not the compensating use tax, we’re still in better condition than we were last year.”
Compensating use tax is a tax paid to out-of-state retailers on goods and merchandise purchased from other states on which no sales tax was paid. It is also due if the other state’s rate is less than the Kansas rate of 6.5 percent paid at the time of purchase. The tax protects Kansas businesses from unfair competition from out-of-state retailers who sell goods either tax-free or at a lower tax rate. It also assures fairness to Kansans who purchase similar items in Kansas and pay Kansas sales tax.
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