$94 million tax package approved by Kansas Legislature, heads to Gov. Kelly’s desk
Millions in tax cuts and increases are headed to Gov. Laura Kelly’s desk after the Kansas Senate voted Tuesday to approve a package that was passed by the House earlier in the day.
The measure combined several provisions already approved by the Senate as part of a roughly $500 million tax cut it passed last month. The House did not vote on that bill.
After the House approved the measure 81-43 Tuesday morning, the Senate voted 30-10 to accept the bill. The House legislation fell two votes short of a veto-proof majority.
The measure cuts state revenue by about $130 million annually. It increases the standard deduction, allowing taxpayers to itemize state returns regardless of whether they did so on federal tax returns, and lets multinational corporations bring overseas profits back to Kansas without paying income tax.
Tax cuts for retirees, included in the Senate package, were not in the House bill. The measures were amended into a separate bill approved by the Senate Tuesday.
About $35 million of the reductions are offset by applying Kansas sales tax to out-of-state retailers who sell products online in Kansas. The cost of a provision allowing businesses to deduct from taxes any expenses involving Paycheck Protection Program loans is not yet known.
Senate Minority Leader Dinah Sykes, a Lenexa Democrat, urged the chamber to wait to act on the measure until after that cost was known.
Lawmakers are also still looking for guidance from the federal government on how the policy will impact federal stimulus funds.
In a Republican Caucus meeting, Tuesday, Sen. Caryn Tyson, a Parker Republican and chair of the Senate tax committee, said the House tax package was good legislation.
“I think the Governor might sign this,” Tyson said.
Kelly vetoed a similar bill with the itemization and cuts for multinational organizations in 2019. Earlier this year, she said the Senate’s version of the bill would “blow a hole” in the state’s budget.
As an alternative to the itemization and cuts for multinational corporations, last month Kelly suggested the increase in the standard deduction alongside the sales tax for out of state goods and a tax on online services like Netflix.
The governor has not said what she thinks of the House proposal which includes elements she’s supported but also includes cuts she’s said are too heavily focused on wealthy Kansans and multinational corporations.
This story was originally published March 30, 2021 at 7:11 PM with the headline "$94 million tax package approved by Kansas Legislature, heads to Gov. Kelly’s desk."
