Derby City Council members decided Tuesday to pursue litigation against the Kansas Department of Revenue in regards to how the city’s special half-cent sales tax is split out on vehicles purchased outside of Derby.
Derby resident Jane Polk noticed the discrepancy when she purchased a vehicle in Wichita last year. As an accountant, Polk said she was interested in seeing how much that half-cent Derby sales tax actually amounted to.
“So when I bought my tags, I just looked to see that it was the half-percent and I couldn’t figure out why all the half-percent didn’t show Derby,” she said. “I thought, ‘Well that’s kind of strange.’”
Instead of showing a half-percent going toward the City of Derby, it showed two-thirds of that half-percent going to Sedgwick County and the remaining third going to Derby.
So, on a vehicle purchased in Wichita for $10,000, Sedgwick County gets its 1 percent cut of $100 at the point of sale.
When the car is registered to a Derby address, an additional $50 is taken as the Derby half-cent sales tax approved by voters. But instead of that all going toward the city of Derby, $33 is sent to the county, allocated as “County Sales Tax,” while the remaining $17 is sent to Derby.
“My initial reaction was that Derby was getting cheated out of part of it,” Polk said. “I guess I wanted to know why.”
(Read more: DerbyInformer.com – news,news/)