News from the Dome, Week 8

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News from the Dome, Week 8

March 10, 2019 | Uncategorized | No Comments

This week the legislature returned after a short turnaround break. While the week was short, we squeezed in plenty of action. House Republicans worked together to fight on behalf of Kansas taxpayers and employers. Unfortunately, Governor Kelly and the Democrats came down firmly on the side of expanding the scope of government. Last year anyone who watched TV saw Governor Kelly say over and over again that a little extra goes a long way. It was clear this week that the Governor would like to take a lot extra from Kansas taxpayers to pay for her government expansion plan.

Taxes

Taxes. Without a doubt the biggest news of the week. House Republicans passed SB 22 this week with an overwhelming majority of 76-43. Not a single Democrat voted for the bill.

We’ve talked about this before, the Kansas tax code is tied to the federal tax code. When the federal tax cuts passed last year, the Kansas tax code was no longer in sync with the federal tax code and this created issues. And by issues I mean a tax increase on Kansans. If SB 22 does not become law, there will a tax increase on Kansans. 

This is not Brownback 2.0. This is not slashing taxes for corporations. It is the prevention of an unintended tax increase on working Kansans and Kansas employers. To dig a little deeper, if SB 22 does not become law some Kansans will pay more taxes on their medical expenses and home mortgages among other things. That is more than a little extra being taken from family budgets. 

There are a couple other provisions of the bill that have garnered discussion. One is a piece that lowers the food sales tax by 15%. Kansas has one of the highest food sales tax rates in the nation and SB 22 begins addressing this problem. This is a provision that will benefit every Kansan and is especially helpful to those on a fixed income. It’s also something that Governor Kelly ran on but oddly now seems to oppose.

One final provision concerns the online sales tax for out of state businesses. This provision gave some, including me a little bit of heart burn. But when you break down the issue it’s a fairness issue and an enforcement issue. Businesses that have any physical location in the state currently must collect sales tax. Businesses with no physical presence in the state currently do not have that same requirement. Individual Kansans who make purchases from these businesses are actually tasked with keeping track of their purchases and tax liability. This seldom happens. Instead what happens is the out of state businesses are able to undercut our Kansas businesses by not collecting taxes. The provisions in SB 22 will put the onus on the out of state businesses to collect sales tax just like their Kansas counterparts. 

This is a lot of information, but I think it’s important for you to understand what SB 22 really does. We’ll see what happens next. At the end of the day Governor Kelly will need to decide whether to veto the bill. If she does, she will raise taxes on Kansans and fail to provide food sales tax relief. She will break two of her campaign promises. 

You may wonder why she would do that. Well if you ask me, it’s because the Governor made the mistake of counting her money while she was still sitting at the table. But it’s not her money, it’s your money, and the dealing is not done. Governor Kelly has already made plans to spend your money. Republicans will fight to the end to let you keep it.

House Action This Week

As we returned from a short break, this weeks action in the House was limited. We had two votes in the House.

HB 2160 allows Wabaunsee county to hold a ballot election regarding sales tax assessment. Voted YES

SB 22 provides choice of Kansas itemized deduction or standard deduction, defers taxes on foreign income, establishes taxes on global intangible low-taxes income, modifies income tax on business interest, capital contributions and FDIC premiums, reduces the food sales tax and enforces online sales tax collection. Voted YES

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