TOPEKA — The Kansas House gave initial approval Monday for a tax reform plan responding to the behemoth tax bill passed by the Senate last month.
The House proposal incorporates elements of the $470 million Senate plan with a tax increase on out-of-state retailers who sell products online in Kansas. The measure would cost the state an estimated $284 million from 2022 to 2024, with a sizable chunk devoted to allowing Kansans to take the standard deduction on federal income tax returns and claim the benefits of itemized ductions on state income tax returns. Another component would provide tax breaks for multinational corporations.
The change would decouple federal and state law, which currently forces individual taxpayers to pick the standard deduction or itemization on both federal and state income tax forms.
Some of these costs would be offset by the marketplace facilitator tax — requiring online, out-of-state retailers to collect sales tax for sales above $100,000 annually — but opponents of the bill raised questions about who this bill would benefit. Supporters touted the bill as a reasonable alternative to the plan brought forth by the Senate.
Rep. Adam Smith, R-Weskan, detailed additional provisions in the decoupling section of the bill.
“If you received a 1099 and you did not receive your unemployment benefits, you are not liable for that and this bill would clarify that you do not owe any income tax on fraudulent unemployment compensation obtained on your behalf,” Smith said.
House lawmakers are set to vote on the measure Tuesday as they await federal guidance on how the tax changes could impact available federal aid funds.
The House version of the tax bill remained intact throughout floor debate despite efforts of Democrats who brought forth four amendments, each of which were rejected.
“This could be very costly to the state of Kansas,” said House Minority Leader Tom Sawyer, D-Wichita. “I don’t think we ought to conform until we know what all the cost is and what the ramifications are to the state and to our budget.”
Most amendments sought to reduce tax breaks provided to multinational corporations.
“Are we up here to represent the interests of large multinational corporations, or are we up here to represent the interests of Kansans across the state?” said Rep. Jerry Stogsdill, D-Prairie Village.
