Brief⁽¹⁾

H.B. 2059 would extend the sales tax exemption for construction labor services to all construction labor services, including commercial construction. It would also provide a sales tax exemption for sales of nonprofit organizations when the proceeds are solely expended for youth development programs.

Background

The House Committee held a hearing on H.B. 2059 at which time 14 proponents offered testimony in support of the bill. These proponents included representatives of Kansas cities, counties, chambers of commerce, contractors associations, business groups, and individual business owners. The House Committee amended the bill to add the exemption for certain sales of nonprofit organizations.

The Department of Revenue estimates the fiscal impact of H.B. 2059 in its original form to be a loss of $15.9 million in fiscal year 2000, of which $15.1 million would be from the State General Fund and $0.9 million would be from the State Highway Fund. The corresponding fiscal impact in fiscal year 2001 would be a loss of $17.9 million, of which $17 million would be from the State General Fund and $0.9 million would be from the State Highway Fund.

No estimate is available at this time for the House Committee amendment.

1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/bill_search.html.