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Jan. 17, 2018
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Minutes for HB2235 - Committee on Taxation

Short Title

Concerning Kansas sales and compensating use tax, administration and reporting requirements.

Minutes Content for Tue, Feb 14, 2017

Scott Wells, Assistant Revisor provided an overview on HB2235.  He noted HB2235 concerns retailers who are making sales in Kansas but not collecting Kansas sales tax.  The Department of Revenue has requested an amendment which is technical in nature and will make the provisions of this act part and supplemental to the Kansas Retailers Act.

Scott Wells answered a question which was asked by Chairperson Johnson.

Kathleen Smith, Department of Revenue provided an overview on the fiscal note for HB2235.  The Department of Revenue estimates HB2235 would increase state revenues by $100,000 in FY2019 and $2.0 million in FY2020. The administrative impact would detail the number of individuals to implement this bill.  There also would be a need to develop an educational program, identify those retailers who are not collecting the tax and attempt to register them and provide requirements. 

Responding to a question from Chairperson Johnson, the conferee stated the administrative cost would be around $270,000.

Representative Davis requested worksheets from the conferee on how the Department of Revenue arrived at $270,000. for administrative cost.

Chairperson Johnson recognized Mark Beshears, Legal Services, Kansas Department of Revenue who noted the Kansas legislation is similar to legislation that was passed in Colorado in 2010.  This legislation is an attempt go around the Quill v. North Dakota case and try to identify the out-of-state retailers who are making sales in Kansas, do not have physical presence in the State of Kansas and not collecting Kansas sales tax.   

The Committee had questions regarding the fiscal note and realistic expectations of this legislation might be premature based on six weeks worth of data collected from the State of Colorado. 

Proponents:

Cindy Green, on behalf of the League of Kansas Municipalities testified in support of HB2235. (Attachment 1)   Ms. Green stood for questions from the Committee.

Responding to a question from Chairperson Johnson, the conferee stated the estimated sales tax revenue loss for cities in Kansas is between $45 million to $65 million a year. 

Written only testimony in support of HB2235 was presented by Kiel Mangus, Assistant City Manager, City of Manhattan, Kansas. (Attachment 2)

Neutral:

Eric Stafford, The Kansas Chamber testified on behalf of out-of-state retailers as a neutral party to HB2235(Attachment 3)

Kathleen Smith, Department of Revenue presented written only testimony as a neutral party to HB2235(Attachment 4)

There being no other conferees, Chairman Johnson closed the hearing on HB2235.