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Minutes for HB2756 - Committee on Taxation
Short Title
Concerning sales and use tax; remote retailers; nexus; marketplace facilitators; digital products.
Minutes Content for Thu, Mar 1, 2018
Scott Wells, Senior Assistant Revisor provided an overview on HB2756 noting the bill contains a number of provisions: 1) Sections 1 through 10 create the new Kansas Main Street Parity Act; 2) Sections 12 and 13 would impose sales tax upon sales of digital property and subscription services. He stated if the bill continues forth there is a technical amendment to be added to clean up old language from the previous version of the bill referring to the Main Street Parity Act under a different name. Mr. Wells stood for questions from the Committee.
Max Behlke, Director, Budget and Tax State-Federal Relations Division, National Conference of State Legislatures, provided an overview on remote sales tax collection market place laws Mr. Behlke noted states are reliant on sales and excise taxes, accounting for state revenue. The inability to collect sales taxes threatens the long term viability of the tax for states and their budgets. (Attachment 1). Mr. Behlke stood for questions from the Committee.
The Committee discussed states that use the electronic app approach to nexus and other states working on legislation.
Representative Francis provided an overview on sales tax for digital products in the U.S. where digital products are taxed across the nation as of 2017. There are 27 states that tax digital products and 23 states that do not. Also included are three online companies where taxpayers can insert the zip code or billing address and the sales tax will be calculated. (Attachment 2) and (Attachment 3).
Proponents:
Lona Duvall, Finney County Economic Development Corporation testified as a proponent for HB2756 (Attachment 4). Ms. Duvall stood for questions from the Committee.
Eric Stafford, Kansas Chamber testified as a proponent for HB2756 (Attachment 5). Mr. Stafford stood for questions from the Committee.
Nathan Eberline, Kansas Association of Counties testified as a proponent for HB2756 (Attachment 6). Mr. Eberline stood for questions from the Committee.
Trey Cocking, League of Kansas Municipalities testified as a proponent for HB2756 (Attachment 7). Mr. Cocking stood for questions from the Committee.
Heidi Holliday, Kansas Center for Economic Growth testified as a proponent for HB2756 (Attachment 8). Ms. Holliday stood for questions from the Committee.
Myca Bunch, Garden City Chamber of Commerce testified as a proponent for HB2756 (Attachment 9). Ms. Bunch stood for questions from the Committee.
Christy Hopkins, Western Kansas Rural Economic Development Alliance testified as a proponent for HB2756 (Attachment 10). Ms. Hopkins stood for questions from the Committee.
Written testimony in support of HB2756 was submitted by the following:
Dennis Blomberg, Viking Auto Supply (Attachment 11)
Ed Eilert, Johnson County (Attachment 12)
Kendall Kepley, KEP's Menswear, Garden City, KS. (Attachment 13)
Janae Talbott, Russell County Economic Development and CVB (Attachment 14)
Katie Schroeder, City Attorney, City of Beloit (Attachment 15)
Amy L. Lange, City Manager, Concordia (Attachment 16)
Richard U. Nienstedt, City Manager, City of Ottawa, Kansas (Attachment 17)
Mike Taylor, Unified Government Relations, Wyandotte County, Kansas City, Kansas (Attachment 18)
Jeff Longwell, Mayor, City of Wichita (Attachment 19)
Cherise Tieben, City Manager Dodge City (Attachment 20)
Jerry Mayo, Mayos, Clay Center, Kansas (Attachment 21)
Opponents:
Michael Smallwood, KCK Chamber of Commerce testified as an opponent to HB2756 noting the Kansas City Chamber of Commerce believes that internet sales should be subject to sales tax but it is an issue of compliance and how small businesses can provide a solution regarding collection of the sales tax law. He stated small businesses within the Kansas City Chamber of Commerce support a reasonable federal approach with simplified collection and remittance and cannot be something that provides a reliance burden to the small business owners (Attachment 22). Mr. Smallwood stood for questions from the Committee.
Hearing closed on HB2756.
