Some area merchants have been overcharging customers on sales tax, not realizing that the continuation of the half-cent tax that voters passed in November doesn’t go into effect until April 1, said Riley County Treasurer Eileen King.
King said that counties must tell the state about sales-tax changes in October in order for the change to take effect by Jan. 1. Because the outcome of the sales-tax initiative wasn’t known until November, the change couldn’t go into effect until April 1. Because of the lag, merchants will have to manually reduce their rates from 8.55 percent to 8.05 percent to for the next three months.
“Merchants cannot take that additional .5 percent from consumers,” King said. “If it’s a big ticket item, like a car and they can identify the people they added that tax onto, then they can refund that tax.”
King said that if a merchant or business cannot identify the people who were over-taxed, they would have to call the tax division at the state.
“The will need to remit the exact amount of taxes they collected and the state will pro-rate it and then send a refund,” King said.
King said that when the tax goes back up to 8.55 percent, merchants will again have to manually fix their sales tax rates. King said she wants to see business owners — especially small business owners — take note of changes in sales-tax rates.
“The chamber came to me after a meeting and said around 50 percent didn’t know that the sales tax was changing,” King said. “I’ve had smaller merchants, like people who sell Avon or Mary-Kay, who don’t know about it.”
While this might be a headache for merchants, the tax reduction could be a bonus for consumers.
“If you were to buy something between now and the end of March, you are going to be paying half a percent less,” King said. “On big purchases, like purchasing a car, it will make a big difference.”