Week 8 Newsletter
On Friday, March 8th, the House passed SB 22, a bill that has already passed the Senate to "decouple" the State tax return from the Federal. On a vote of 76-43 (of which I was a Yes vote), the House made official their desire to send to the Governor's desk a bill that would do the following:
As it relates to Individual Income tax, SB 22 will allow you to itemize on your State tax return even if you don't on your Federal. Why is this important? Currently, if you itemize on your Federal, your required to the same on your State. Same if you take the standard deduction, it must be the same on both returns. When the Federal government passed major tax reform last year, it doubled the standard deduction for married filed joint filers to $24,000. Here is an example to put it in perspective.
If you were married filing a joint tax return and had $17,500 in itemized deductions, you would of course take the $24,000 standard deduction on your federal return because it is more than your itemized deductions and would result in less taxes. However, on your state tax return, the potential impact would be:
$17,500 Itemized Deductions
- $7,500 Standard Deduction
= $10,000 in “lost” deductions
x .057 (assuming highest marginal tax bracket)
= $570 in Additional Kansas Income tax Liability
I voted to give you your $570 back!
For multi-national companies, this bill clarifies language in the Kansas tax code so that changes in the federal tax code do not trigger unintended tax hikes at the state level for business owners. Right now, Kansas companies that do business outside of the United States pay taxes on those profits at the federal level. Those profits are not taxed at the state level and never have been. Without this bill, these Kansas companies would be subjected to additional taxes at the state level, making Kansas a more expensive state for businesses to operate in.
For every Kansan who buys groceries, this bill lowers the food sales tax by 15% so every Kansan will see a drop in their tax burden every single time they go to the grocery store.
For Main Street businesses, this bill eliminates an unfair playing field that makes it cheaper for out of state businesses to sell to Kansas customers because they don’t have to collect sales taxes like Kansas businesses do. Removes liability from individual Kansans to track, record, and report out of state purchases and places that liability on the out of state merchant where it belongs. Stops giving out state businesses an upper hand so that our local brick and mortar store owners can compete.
Since the Senate sent the House a clean bill, free of amendments, and the house added the food sales tax decrease and the main street fairness piece, the Senate now has to decide whether to concur with the House changes or take it to conference committee to work out the differences. Once that occurs, only time will tell if the Governor will sign it.
The school funding deadline is looming and the conversations in the state house are heating up. On February 28, the story broke that the Schools for Fair Funding (SFFF) had submitted corrected testimony to the Senate Select Committee on Education Finance. The SFFF had testified at the February 6 hearing on SB 44 that the group would drop its lawsuit against the state if the Legislature approved the Governor’s proposed school finance changes of around $90 million.
However, on February 26, amended and supplemented testimony was provided by the SFFF lobbyist, Bill Brady. Brady indicated there needs to be more funding provided to the Bases in years 2, 3, and 4 in the bill. The Bases need to reach the Total Targeted Aid of $3.7 billion in FY 23. The state would need to expend an additional $270 million to make up the difference and be compliant with the Gannon VI decision, according to the SFFF.
I am a strong supporter of our public schools. Each of my children have attended or currently attend Hesston USD 460. We have a superb public schools system and I want to ensure it stays that way, but with 5 years of base aid increases already booked, will these 4 schools that make up the Schools for Fair Funding ever be satisfied? Will the Supreme Court just keep aquessing to their requests? This has to come to an end and I am not sure more money is the answer.
The House begins meeting again on Wednesday for a full week of work. The more difficult conversations of school funding and budget are at the forefront of everyone’s mind. In addition, hearings are scheduled regarding medical marijuana in Judiciary (of which I am member). More to come next week on that.
Please let me know if you have any concerns or topics of interest. I would be happy to visit with you. It is truly an honor to be your Representative and I am humbled by your prayers and support.
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Sat, March 16 - Hillsboro: City Offices 9am
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Until next week,
Rep. Stephen Owens
PH: (785) 296-7500