Brief ⁽¹⁾

SB 233, as amended, would exempt from local sales taxation natural gas sales for residential and agricultural use until July 1, 2002. The bill would take effect upon publication in the Kansas Register.

Background

Residential and agricultural utility services are exempt from the state sales tax but are subject to sales taxes imposed by cities, counties, and municipal universities.

The latest fiscal information on the bill indicated that local sales taxes would be expected to decline by about $11.5 million annually. The impact could be greater to the extent that the bill could be in effect for longer than one year.

Under the Senate Assessment and Taxation Committee amendment, the bill has no fiscal note for the state beyond $20,000 requested by the Department of Revenue for administrative costs. The original bill would have transferred from the State General Fund to the County and City Revenue Sharing Fund up to $6.8 million of gas severance tax receipts in excess of the current estimate. The amendment removed that provision.

Senator Allen, the bill's principal sponsor, appeared during the hearing as a proponent.

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/fulltext.cgi