Higher sales tax in some parts of town
Posted By J.T. on April 19, 2009
If you’ve noticed that you seem to pay a bit more in sales tax at the new Price Chopper in Harrisonville then you aren’t alone. Many cities all over the country have special “districts” that self-impose an extra sales tax. Little is mentioned of these taxes in typical media outlets, so the consumers generally aren’t aware of the practice. Normally this extra money is used to help reimburse the developer and to finance road improvements.
Mike Tholen, Finance Director for the City of Harrisonville says that Price Chopper “along with the others in that development, is located in a governmental subdivision known as the Harrisonville Marketplace Transportation Development District. That municipality has imposed an additional 1.000% sales tax on eligible retail sales within the district boundaries to reimburse the developer for the costs of public infrastructure improvements related to the project. This makes the overall effective rate at the Price Chopper today 7.975% for eligible sales (by state law, certain food items are exempt from some, but not all, sales taxes).”
So as of today, if you buy groceries at Wal-Mart, you’ll have an immediate savings of 1% compared to shopping at the new Price Chopper. But maybe not for long. Mr. Tholen goes on to state:
“Similarly, the Harrisonville Towne Center Transportation Development District has imposed a 1.000% sales tax in their district, which includes Sutherland’s and Russell Stover’s, and the Highway 71/291 Partners in Progress Transportation Developments District (Mill-Walk, McDonalds, WalMart area) is discussing the imposition of a sales tax for their area. None of these TDD sales tax rates are listed in the above summaries of citywide rates because they do not apply citywide, only within their district.”
If you shop in Belton -
Mike Wade, Finance Director for the City of Belton: “On sales tax, there is currently one active Transportation Development District (Belton Town Centre) with a 1% tax of it’s own. This is a separate entity from the City and was set up through the courts to make improvements to the transportation system for that area. The TDD is becoming a very common tool throughout Missouri for making road improvements.
There is one other TDD formed around the new South interchange currently under construction, but there are no businesses there as of yet. It was a cooperative effort by the Cities of Raymore, Belton and Cass County.
Since the Belton Town Centre Transportation Development District is also in a Tax Increment District, half of the tax collected goes to the district for road improvements. They have a board of directors who develop a budget for how their money is to be spent. As a legal subdivision of the State, they have restrictions on how that money can be spent.
The TIF half of the tax goes to fulfill the obligation of the TIF Redevelopment area which in this case was the construction of that shopping center and supporting infrastructure as well as road construction like the City portion of the new interchange being built at Hwy Y and 71.
The TDD is going to improve roads in that Hwy Y vicinity, but haven’t collected enough money to accomplish that yet. The tax was 1/4 of 1% up until very recently, so not a whole lot of money has been generated so far
And Raymore -
Cynthia L. Freeman, Financial Analyst, City of Raymore:
“The 58 Hwy Market Center CID (Price Chopper, etc.) is the only district currently assessing additional sales taxes for their districts. The additional sales tax can not exceed one-half cent, which is what is currently being charged by the district. This would bring the total sales tax charged at Price Chopper 8.975%. ”
So what have we learned? 2 districts in Harrisonville (Price Chopper, Sutherlands) currently have an additional 1% sales tax, and there’s a possibility that another district will do the same (Wal-Mart, Mill-Walk, etc…). Belton has an additional 1% sales tax in the Belton Town Centre and Raymore has an additional .5% sales tax in one district there (Price Chopper).
I am certainly not lamenting the fact that patrons must pay a little extra but it’s nice to know where these entities exist.
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