The tax cutting bill Brownback signed into lawOVERLAND PARK — A flaw in the massive tax cutting bill Gov. Sam Brownback signed into law earlier this year will make many business owners pay more taxes when they pay themselves back for investments they made in their businesses, Gary Allerheiligen, a Wichita accountant, told hundreds of business leaders Tuesday.
The legislature needs to quickly fix the inadvertent error as soon as possible once they convene in Topeka for the 2013 session, he said.
When business owners invest in their business, they can pay themselves back using their profits without paying taxes on it. But under the new law, business owners will have to essentially pay capital gains tax on that money.
"That was not the intent of the legislature,” said Allerheiligen who consulted with Brownback about tax policy during the session earlier this year.
Asked whether the legislature would act quickly, Brownback said he couldn’t provide a reliable answer.
"My sense would be that would be something people would try to clear through early,” he said.
When asked how big of a problem the flaw is, Brownback told a reporter he’s not sure yet.