Governor’s Council on Tax Reform readies initial recommendations for upcoming legislative session

The Governor’s Council on Tax Reform on Tuesday recommended ways to expand the tax base and reinstate a food sales tax rebate for low-income Kansans. 

The council’s recommendations will go to Gov. Laura Kelly in preparation for the 2020 legislative session, which starts Jan. 13, and then the council will continue working on further tax reform for the 2021 session. 

On Tuesday, the tax council voted to support a mix of recommendations related to discussions members had been having throughout the fall. The first recommendation adopted was to support proposed legislation on collecting taxes for online sales through Marketplace Facilitators. This recommendation follows the U.S. Supreme Court’s June 2018 ruling in South Dakota v. Wayfair that states can mandate online retailers without a physical presence collect and remit sales taxes. 

The next recommendation was to support proposed legislation allowing for the taxing of digital products. Testimony from Mike Hale, attorney with the Kansas Department of Revenue, indicated that the draft legislation would follow examples and guidelines that would keep Kansas in compliance with the Streamlined Sales Tax agreement and allow for an equal playing field for brick and mortar stores in Kansas that sell the physical versions of digital products that are currently not taxed. 

After previous discussions on the sales tax rate on food and the different options available, the council made a recommendation to reinstate the Food Sales Tax Credit for lowincome earners in Kansas. While discussions were had on lowering the overall sales tax rate on food, the impact would be minimal to the average taxpayer but those most affected would see a greater benefit from the food sales tax credit. 

The committee also made a couple recommendations related to cities and counties that would encourage the funding of the Local Ad Valorem Tax Relief policy to help decrease local property taxes and recommend that cities and counties be able to support the upcoming transportation plan with their expenses being exempted from the local tax lid. 

The committee did add language that would caution both the governor and Legislature in moving too quickly on any policy that would decrease state revenues significantly until the state is in a more stable financial situation and agreed to continue looking at other policies and ideas next year related to the effects of the 2017 Tax Cut and Jobs Act and how that affected Kansas taxpayers. 

Gov. Kelly appointed two former veteran legislators to chair the council — former Senate President Steve Morris, a Republican from Hugoton, and Janis Lee, a former Democratic state senator. Kelly also appointed to the council KASB President Shannon Kimball, a member of the Lawrence USD 497 school board. 

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