Senate Tax Committee begins to build a new tax billAustin Harris
The Senate Assessment and Taxation committee held a short hearing on SB 215, which mirrors the tax plan that was laid out in Sub HB 2178, except it removes the retroactive start date of the new income tax plan. There were no conferees on the bill and no comments from the committee, leading to the shortest tax bill hearing of the session.
After the hearing the committee started working SB 214, which will return the medical expense deductions back to 100 percent on medical expenses and charitable contributions and maintains the 50 percent deduction on property taxes and mortgage interest.
The idea as offered would be a to repeal the LLC exemption stating on Jan. 1, 2017, then beginning on Jan. 1, 2018, change the income tax code to a 5 percent flat tax on all taxable income, moving the standard deductions up to $10,000 single, $15,000 Head of Household, and $20,000 married filing jointly.
In addition, Denning would remove the pre-tax exemption on the Kansas Regents KPERS Plan requiring members to claim their contributions in their taxable income, in the same way the general KPERS plan and Kansas Police and Fire plans do.
The final recommendation was to repeal the low-income exclusion, as those individuals would be covered by the increased standard deduction.
The increased standard deduction would cost $285 million per year but the new flat tax rate would increase annual revenue numbers by $714 million per year, which would leave roughly $429 million net gain in revenue. Or just about enough to cover the current projected deficit in fiscal year 2019.
Chairwoman Caryn Tyson (R-Parker) indicated her desire for a smaller tax package as they were closing the committee meeting. The discussion will continue tomorrow at 8 a.m.