TOPEKA — The Kansas Senate late Friday rejected an agreement between committees from both chambers on a property tax bill after including a highly scrutinized property tax exemption for health and fitness clubs.
House Bill 2313 includes provisions to provide financial relief for smaller retailers hurt by temporary shutdown orders during the pandemic, and expands a law exempting Kansans in the military from paying property taxes on two vehicles. The bill also includes an extension of a 20-mill property tax levy that generates $750 million annually for K-12 public schools.
In a tradeoff, the House contingency offered to support a Senate-backed section of the bill providing elderly Kansans with a residential property tax “freeze” in exchange for including House Bill 2445 — the fitness club exemption. The measure received a House committee hearing in March but did not pass out of committee in either chamber.
Rodney Steven, a Wichita businessman who owns Genesis Fitness Clubs and was represented by former congresswoman Lynn Jenkins, sought the exemption because he said nonprofits and municipal recreational facilities made it difficult to operate profitably. Tax records acquired by Kansas Reflector indicate Stevens owed at least $549,000 in pre-pandemic property taxes to several Kansas counties while engaging in this effort.
Sen. Caryn Tyson, a Parker Republican, accepted the House offer to try and push the measure across the finish line on what looks to be the final day of the legislative session.
“We’ll put this up in the air and see where the chips fall,” Tyson said.
The Senate rejected the measure by a vote of 11 to 27. The House and Senate planned to send negotiators to iron out issues in the bill, which previously passed the Senate without the health clubs provision by a 33 to 6 vote.
Had the measure been passed by the Legislature and signed by the governor, Genesis Health Clubs owned by Steven would avoid an estimated $2.5 million annually in property taxes.
The exemption would siphon $1.1 million per year from Johnson County property tax revenue and between $273,000 to $366,000 from Sedgwick and Riley counties.
In a meeting Thursday, several members of the House Taxation Committee expressed displeasure with some major Senate amendments sent to them in the final days of the session. On the floor, Representatives chose not to concur on the changes sending it to Friday’s conference committee.
The bill would require a property tax refund from state and county governments to support certain small businesses forced to close, limit capacity or cut hours amid the COVID-19 pandemic. Larger retailers who were able to remain open — like grocery, liquor and hardware stores — would not qualify for the tax break.
To be considered for the tax break, businesses could have had no more than $2.5 million in annual revenue. Eligible businesses also could not have accepted more than $150,000 in other pandemic financial relief funds.
Changes to the bill agreed upon by the two chambers included no property tax relief for businesses if they were made whole using COVID-19 relief funds. It also clarifies that dentists can get relief as can “personal services” such as massage therapists and chiropractors.
