City of Derby News Releases

Posted on: September 21, 2017

Derby, Goddard, and Haysville Seek Supreme Court Order Against Kansas Department of Revenue

sales tax

On September 20, 2017, the Cities of Derby, Goddard, and Haysville filed a Petition for Mandamus with the Kansas Supreme Court asking for an order requiring the Kansas Department of Revenue (KDOR) to comply with Kansas law. The dispute arises from KDOR’s improper distribution of local sales and use taxes.

Since 2003, Derby has collected a half-cent sales tax for specific city facilities and services as authorized by voters in three special elections. When a Derby resident purchases a vehicle in Wichita, the state and county sales taxes are collected at the Wichita dealership while the Derby local sales tax is collected at the time of vehicle registration. However, KDOR then distributes 2/3 of the Derby local sales tax to Sedgwick County, and Derby only receives 1/3 of its voter-approved tax, which is contrary to Kansas law.

“All we seek is fairness and enforcement of the law as written and intended by the Kansas Legislature years ago,” said Kathy Sexton, Derby City Manager. “Citizens who vote to tax themselves to improve their community should not be thwarted by state officials not following state law."

The matter was brought to Derby’s attention by a resident who questioned whether the City was receiving the full benefit of its local sales tax after noting the discrepancy on her vehicle registration receipt. Derby immediately contacted KDOR to point out the error. Despite Derby’s efforts, KDOR has repeatedly refused to administer the law as required by Kansas statute. Due to KDOR’s refusal to correct its protocols, Derby continues to collect tax at a rate lower than the city’s voter-approved local rate while KDOR continues to distribute tax to Sedgwick County at a rate higher than the county’s voter approved local rate.

The cities of Goddard and Haysville recently joined Derby in its efforts to require KDOR to follow Kansas law. Goddard and Haysville each collect a local sales tax and are being similarly affected by KDOR’s failure to follow Kansas law. Other cities throughout the state are also affected by KDOR’s actions, and some are considering supporting this effort through an amicus brief to the Kansas Supreme Court.

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