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.