Gov. Sam Brownback has vetoed a bill that would have enabled Kansans to present new evidence before a district court when challenging tax rulings.
SB 280, which Brownback vetoed Tuesday, would have allowed any taxpayer appealing a decision by the Board of Tax Appeals to have a new trial in district court, where new evidence could be presented. The board is a special panel appointed by the governor to settle tax disputes.
The bill passed the Legislature unanimously earlier this month, and lawmakers will likely attempt to override the governor’s veto when they return for Sine Die on June 1.
“I think people will be champing at the bit to do it once they find out what happened and what he’s done,” said Rep. Jerry Lunn, R-Overland Park, one of the bill’s main advocates. “It doesn’t make any sense to me. There’s no rational explanation.”
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Lawmakers and lobbyists have said Brownback is resistant to the idea of district court trials with new evidence – known as de novo reviews – because of his concerns that it will hurt the state’s efforts to defend against a lawsuit from pizza magnate Gene Bicknell.
Bicknell has been fighting the state for a decade about whether he was a resident of Kansas in 2006 when he sold his company NPC International and therefore subject to Kansas income taxes. Bicknell maintains he was a resident of Florida at the time.
He paid the state $42 million in 2013 after an unfavorable ruling by the Court of Tax Appeals, now known as the Board of Tax Appeals.
However, the Kansas Court of Appeals ruled last year that the tax court had “expressly ignored or disregarded” when it ruled on Bicknell’s residency and ordered a new review of the case.
The case remains pending after the state appealed that ruling to the Kansas Supreme Court. If SB 280 becomes law, Bicknell could theoretically present new evidence before a district court in the future.
“All Kansas taxpayers should have a fair and impartial system of justice,” Brownback said in a statement.
“Tax obligations should be contested before the Board of Tax Appeals and not by seeking special treatment through the legislative process,” the governor said, suggesting that lawmakers supporting the legislation were working on behalf of Bicknell, a frequent donor to Republican campaigns.
Refunding Bicknell’s money could cut the state’s projected cash balance for next fiscal year in half.
Bicknell said in an e-mail that if the governor “is truly concerned about fairness for taxpayers, he would not veto a bill that was passed unanimously by the House and the Senate, and is supported by the Kansas Chamber and the Kansas Association of Realtors.”
“Instead, the illogical reasons for his veto demonstrate that he will continue efforts to ensure that taxpayers are forced to play on an unlevel playing field and are not afforded the opportunity for de novo review by a district court of BOTA (Board of Tax Appeals) decisions,” he said.
Lunn said the issue affects any Kansan who is seeking to appeal their taxes.
“I don’t care if it’s Bicknell, if it’s $50 or $50 million. I don’t care. You give those people that fair opportunity,” he said.
Lawmakers and lobbyists have said that the governor’s office had indicated Brownback would be willing to sign a version of the bill that would allow de novo reviews to take place only for property tax cases.
Lunn called that hypocritical, noting that property tax cases have an impact on county and city governments, while income tax cases, such as Bicknell’s, have an impact on the state’s coffers.