The $1.2 billion tax increase approved by the Kansas legislature will impact almost every working Kansan, so it’s important to understand exactly what the new law does.
This tax increase is the largest in state history, and it pays for the largest budget in state history. Almost every taxpayer in our state will see their paycheck decrease after July 1.
If you work for someone other than yourself, your employer will use new withholding tables to calculate how much additional money to take from your paycheck to pay your larger tax liability. Because the tax law is retroactive to Jan. 1, you now owe more taxes on what you’ve earned so far this year. The amount withheld going forward is intended to catch you up so that you don’t end up owing a huge amount come April 2018. Additionally, I recommend talking to your tax preparer to ensure the additional money withheld is sufficient to address the increased amount you owe under the legislature’s new law.
Small business job creators will also experience a sizable tax hike. Small businesses were previously exempt from paying income taxes to drive job creation and economic growth in Kansas. The new law imposes the same rates on small businesses that are imposed on individual taxpayers in the new three-bracket structure. To see those rates specifically, please visit our website, ksrevenue.org.
Gov. Sam Brownback’s previous tax plan eliminated income taxes for nearly 400,000 of the poorest Kansans. The legislature’s new tax hike raises money by shrinking this exemption. This means if you are a single filer with $2,500 taxable income per year or a married couple making $5,000 taxable income, then you will be subject to income tax.
There is further information about the tax changes on our website, ksrevenue.org, and search “notices.”
This largest tax increase in state history funds the largest budget in state history. The legislature’s budget funds more than $200 million in new spending — that is spending above the increased funding for schools. Despite the legislature’s historic $1.2 billion tax hike, they’ve already spent every dime. Unless cuts and efficiencies are made, the legislature will be looking at more taxes in two years.
Regardless, it is our job at the Department of Revenue to ensure collections abide with the law. We will continue to strive to serve our customers with accuracy and respect. As always, filing electronically at ksrevenue.org is the fastest and most simple route. There is also a Taxpayer Assistance Center available to answer questions. Call (785) 368-8222.
Sam Williams is Kansas revenue secretary.