Chain of adult stores to auction sex toys online to pay back taxes to state of Kansas

TOPEKA, Kan. — An online sale of sex toys could give Kansas a boost of revenue.

The sale is being held so the owner of five adult stores can pay off a tax debt to the state.

Back taxes

The Kansas Department of Revenue seized items in July from the stores — operated by United Outlets LLC, under the name Bang — for failure to pay sales, income and withholding taxes of $163,986, spokeswoman Jeanine Koranda said. Two stores were in Topeka and one each was in Junction City, Wichita and Kansas City, Kansas.

Koranda said the assets were released back to the owner to auction the property. “It was simply a business that was not paying the taxes it normally owed, so we went through the steps we normally take,” Koranda said.

Senate Minority Leader Anthony Hensley, a Topeka Democrat, used the auction to make a dig at Gov. Sam Brownback, saying the Republican leader was “so desperate to fill the massive hole in the state budget caused by his reckless income tax cuts that the state of Kansas is now in the porn business.”

Brownback faces a strong challenge from Democratic challenger Paul Davis because of concerns about whether tax cuts are boosting the economy or potentially ruining the state’s finances. Brownback and his supporters insist his policies — particularly aggressive personal income tax cuts — have helped to create nearly 55,000 new private-sector jobs since he took office in January 2011. The Legislature’s nonpartisan research staff is predicting a $238 million budget shortfall by July 2016.

Eileen Hawley, the governor’s spokeswoman, defended the sale, saying the same process has been use in previous administrations.

“While we do not agree with the type of business involved here, it was nonetheless a legal business that was closed due to failure to pay taxes,” Hawley said in a news release. She went on to say the state can’t legally destroy property and that returning it would have rewarded the business that violated state tax law.

Koranda said the state is not involved in the auction, or proceeds of the auction. “What we want is businesses paying the money they legally owe for taxes,” she said.

United Outlets owner, Larry H. Minkoff, of Prairie Village, didn’t have a listed phone number.

The Associated Press