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Huxies: Sales Tax Tokens in Kansas

Posted by Megan Macken (Digital Archivist) on Apr 14, 2017

Governor Walter Huxman

Four months into Walter Huxman's first and only term as governor, the Kansas Legislature passed the Human Retailers' Sales Tax Act in April of 1937. Like many states, Kansas' traditional streams of revenue were in jeopardy as property lost value during the Great Depression. Huxman preferred indirect taxation, but he failed to persuade lawmakers of indirect methods of generating revenue. For Huxman, sales tax was a last resort, but necessary to avoid bankruptcy and to fund social security.

Most Kansans did not agree. Governor Huxman's records in the State Archives* reveal the incovenience, frustration, and outrage the sales tax and token system caused Kansans, even Huxman's supporters. Unlike Oklahoma, which offered a one-mill token, Kansas only issued a two-mill sales tax token. This token represented two tenths of one cent. It allowed a child buying a 10-cent, double-scoop ice cream cone to pay exact sales tax. Without tokens, any tax less than a penny would have to be paid with a penny. Paying a whole penny tax on a 10-cent cone would be a 10% tax rate instead of a 2% rate. With the two-mill token, the child could pay the exact 2% tax or 0.002 cents. For a single-scoop, five-cent cone, however, a child would pay twice the required tax. It wasn't possible to pay the exact amount (1/1000th of a cent) because there was no one-mill token.

Confused? Concerned? So were many consumers in the 1930s. And what kinds of items were taxed? Definitely ice cream, but what about boy and girl scout badges? The badges were not taxed because the Scouts were an educational organization. Newspapers were taxable, but advertising, a service, was not, as the publisher of the Mound City Republic found out only after writing directly to the Governor. Could coal miners' supplies be exempt from sales tax? No, Governor Huxman had to tell United Mine Workers of America there was nothing to be done. Another letter writer declared the tax "a fine law for rich doctors, half-witted lawyers." A heating and plumbing business couldn't afford to hire the new bookkeeper needed to stay on top of all the new work the law created. Another business owner, Lawrence Photo Supply Co., cited evidence that their profits had actually decreased since the sales tax and tokens were instated. A self-described lifelong Democrat advised the Governor not to seek re-election by "adding blood suckers by the thousands" to the state's payroll. Two other writers asked for additional taxes for old age pensions, one requested an additional tax on cigarettes and beer.

It might come as no surprise, then, that during the elections of 1938, Republican nominee Payne Ratner promised to put an end to "Huxies" if elected. Ratner was elected, winning by about 52,000 votes, and upon inauguration in 1939 eliminated sales tax tokens. The tokens could be redeemed for cash for two years and were subsequently melted down. This made Kansas the first state in the country to eliminate sales tax tokens. With the exception of Missouri most other states followed suit, putting tokens out of circulation by the start of World War II. Governor Huxman's career did not end there. Franklin D. Roosevelt nominated Huxman to the United States Court of Appeals for the Tenth District in April of 1939.

*When viewing Governor Huxman's correspondence records in Kansas Memory, the Governor's typewritten response appears before the correspondent's original letter to the Governor. This is because they were originally stapled together with the Governor's response on top.

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