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Minutes for HB2465 - Committee on Taxation
Short Title
Clarifying the determination of taxable income and providing for the passing through of tax credits to electing pass-through entity owners for purposes of the salt parity act.
Minutes Content for Wed, Mar 22, 2023
Chairperson Smith opened the hearing for HB2465.
Mr. Siebers provided an overview on HB2465 and stood for questions from Committee members. (Attachment 2)
Kathleen Smith, KDOR, stated HB2465 would have no fiscal effect on the State General Fund receipts. She stated KDOR has been working with the Kansas Society of CPAs and based upon the bill passed last session which allowed pass through entities to pay tax at the pass-through entity level rather passing the income down was due to the SALT limitation that was imposed at the Federal level. Kansas passed this legislation last year which would allow those pass-through entities to take full advantage of the deduction at the Federal level and would pay the taxes through the pass-through entity rather than passing it down the individual share holders or partners.
Shawn Sullivan, Kansas Society of Certified Public Accountant, testified by Webex as a proponent for HB2465 stating during the 2023 tax filing season for tax year 2022, Kansas CPAs, accountants, and the Kansas Department of Revenue offered different interpretations of how to calculate the Kansas tax liability for Kansas resident owners versus non-resident owners and how to administer the income tax credit that the pass-through owner receives. Solutions were offered in Mr. Sullivan's testimony and also in HB2464, Section 1. (Attachment 3) Mr. Sullivan stood for questions from Committee members.
Chairperson Smith closed the hearing for HB2465.
