Kobach sides with Morton County Commission on distribution of revenue from 1% sales tax

TOPEKA — Attorney General Kris Kobach objected to the Kansas Department of Revenue’s decision to divide proceeds from Morton County’s 1% sales tax among the county and municipalities after voters a decade ago passed a flawed resolution that didn’t specifically tie the revenue to health care.

In 2024, the Morton County Commission learned the Department of Revenue had since 2015 — nine years — spread revenue from the countywide 1% sales tax to three cities as well as the county.

Kobach said in a nonbinding legal opinion last month that the revenue department should stop carving off sales tax revenue for distribution to cities because the clear voter intent 10 years ago was to earmark sales tax revenue for benefit of the county hospital.

On Friday, an official with the Department of Revenue said that starting this month Morton County’s 1% sales tax and compensating use tax would be remitted solely to the county government.

The problem from the Department of Revenue’s perspective was the original sales tax resolution put forward in 2015 by the county commission referenced a general tax provision rather than a special tax provision tied to funding of health care services. The revenue department concluded the resolution embraced by county voters required the 1% sales tax revenue to be shared with cities and the county.

However, Kobach said the ballot debate was framed in a way voters understood a “yes” vote for the sales tax equated to support for collecting sales tax for county health care operations.

“The question here is whether the electors of Morton County understood what their vote meant on the ballot proposal. We believe they did,” Kobach’s written opinion said.

In the opinion, Kobach said state law didn’t require the commission’s published notice or ballot proposition to include a reference to the state law giving a county authority to create a retail sales tax. The result of the commission’s citing of the wrong state law in that 2015 resolution shouldn’t have resulted in diversion to cities of money that voters thought would go to county health services, Kobach said.

“After the voters approved the measure, but before adopting the tax, the board passed and published an amended resolution correcting the authorizing provision,” the opinion said.

(This story has been corrected to remove references to a second unrelated bond vote.)