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Minutes for HB2134 - Committee on Taxation
Short Title
Providing a deduction from sales or compensating use tax when selling a wrecked or damaged salvaged vehicle and purchasing a subsequent motor vehicle.
Minutes Content for Thu, Feb 9, 2023
Vice Chairperson Brian Bergkamp opened the hearing for HB2134.
Adam Siebers, Assistant Revisor, provided an overview for HB2134 to allow an owner of a vehicle that is wrecked or damaged to the extent that it would qualify as a salvage vehicle within the first year of owning the vehicle the ability to apply the sales tax paid on the original vehicle to the replacement vehicle purchased by the individual. (Attachment 1)
Kathleen Smith, Kansas Department of Revenue, provided an overview on the fiscal note for HB2134 stating it is estimated to decrease the state and local sales tax revenues by unknown amounts beginning in FY2024. KDOR knows the number of vehicles salvaged or non-repairable titles that have been issued for CY2022 which was 22,162; however, there is not sufficient information on how many of the vehicles were salvaged as a result of the wreck, the time period between the purchase of the original vehicle and the wreck, and the sales tax paid on the original vehicle or the sales tax on the subsequent purchased vehicle to make an accurate estimate. Ms. Smith stood for questions from the Committee.
Lisa Studer, Wathena, Kansas, testified as a proponent for HB2134 stating she had purchased a vehicle and paid the sales tax and titled in Doniphan County. Less than 30 days later the vehicle was involved in a collision and was determined to be a total loss by the insurance company. Ms Studer purchased a replacement vehicle within a couple of weeks and was required to pay sales tax for total price of the vehicle stating she paid the sales tax twice within 30 days but had only one vehicle. (Attachment 2) Ms. Studer stood for questions from Committee members.
Vice Chairperson Bergkamp closed the hearing for HB2134.
