On the Kansas City ballot in April: new taxes on legal weed and Airbnbs
The Kansas City Council approved three tax questions for the April ballot on Thursday. Officials estimate that the new taxes would generate millions in revenue for the city.
Kansas City voters will have a say in whether to tax recreational marijuana and add new taxes and fees for short-term rentals in the April 4th election.
All 12 city council seats and the mayor’s office will also be up for election this spring.
If approved by voters, city officials say these new taxes could generate millions in revenue for the city.
Kansas City is one of several Missouri cities hoping to benefit financially from the legalization of recreational marijuana.
Kansas City Mayor Quinton Lucas introduced a 3% sales tax, on top of the 6% state sales tax already placed on recreational marijuana. Revenue from the tax funds marijuana oversight programs and the expungement of prior marijuana offenses from people’s records.
Mayor Lucas has said he wants to use the local 3% sales tax to address illegal dumping, homelessness and violence prevention programs. The city estimates that the tax will generate $3 million annually for the first few years, and then $10 million per year after the fifth year.
3rd District-at-Large Councilman Brandon Ellington and 1st District Councilwoman Heather Hall were the only no votes. Ellington said adding a tax to the purchase cost would drive buyers to illegal sellers.
“When you have a legal state that has legal drugs, that you can legally grow it, and you have a city that has a higher imposed sales tax, then that helps stabilize a black market,” Ellington said during Thursday’s council meeting.
Independence, North Kansas City and Blue Springs are also considering implementing similar local sales taxes.
One voter question targeting short-term rentals proposes increasing the current occupancy fee for hotels and motels from $1.50 per night to $3, and requiring short-term rentals to pay that fee. A separate question would subject the rentals to a 7.5% tax; hotels and motels already pay a similar tax.
The mayor’s office estimates that the occupancy fee could generate $4.5 million annually. Taxing short-term rentals would generate an estimated $2-3 million per year.
These measures follow a recent report that found the city loses out on millions by not taxing short-term rentals like other accommodations. City officials say imposing these taxes and fees will place Airbnbs and other short-term rentals on the same playing field as hotels and motels.
“If you're staying at a short-term rental or in Heather Hall's basement or at the Marriott, you're gonna be charged a specific fee so that we're consistent across the board,” said 1st District Councilwoman Heather Hall.
The 7.5% tax passed council unanimously, while only Ellington opposed the occupancy fee.
4th District Councilman Eric Bunch, whose Midtown district has seen an explosion in Airbnbs, called the measures a necessary step.
“This is just one step of several that we will be taking in order to help alleviate the pressure that short-term rentals are putting on our community,” he said.