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Minutes for HB2229 - Committee on Taxation

Short Title

Providing a deduction from sales or compensating use tax when selling and buying different motor vehicles within 180 days.

Minutes Content for Thu, Feb 9, 2023

Vice Chairperson Bergkamp opened the hearing for HB2229.

Mr. Siebers gave an overview on HB2229 providing an individual would only be required to pay sales or use tax on the difference in price on a vehicle when an individual sells a vehicle and purchases a vehicle within 180 days. (Attachment 7)

Kathleen Smith stated the fiscal impact for HB2229 would decrease state and local sales tax revenues by an unknown amount beginning in FY2024.  She stated the department is unable to track the number of individuals selling vehicles and purchasing a different vehicle within six months of the sale to provide a reliable estimate; however, Missouri has a similar program which the department investigated last year when the bill was brought before them.  Missouri does have an annual impact of around $5.0 million and if adjustments were made for the population in Kansas, the impact would be around $2.4 million.  Ms. Smith noted the Missouri program does include selling trailers, boats, and outboard motors which are not included in HB2229.  Ms. Smith stood for questions before Committee members.

Representative Carl Turner, House District 28, testified as a proponent for HB2229 that would give equal sales tax treatment when purchasing a new vehicle to replace an old vehicle whether the old vehicle is traded in at the time of purchase or sold by a private sale within 180 days of the purchase. This bill was introduced because Missouri has laws that are friendly towards this type of transaction and Kansas does not. (Attachment 8)  Representative Turner stood for questions from Committee members.

Written testimony was submitted by the following as proponents for HB2229.

Adam and Kelli Kerr, Leawood, Kansas, (Attachment 9)

Pat and Mandy Foley, Leawood, Kansas, (Attachment 10

Neutral:

Don L. McNeely, Kansas Automobile Dealers Association, testified as neutral to HB2229 that attempts to address the transaction with the completion of the Kansas Department of Revenue form  TR-312 when the seller of the vehicle applies for the corresponding refund if they purchase a different vehicle within 180 days.  Mr. McNeely also believes a copy of the completed TR-312 should be the bill of sale provided to the County Treasurer at the time of registration and collection of sales tax.  Mr. McNeely stood for questions from Committee members. (Attachment 11)

Vice Chairperson Bergkamp closed the hearing on HB2229.