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Minutes for HB2041 - Committee on Taxation
Short Title
Providing a sales tax exemption for purchases by a not-for-profit corporation operating a community theater.
Minutes Content for Thu, Jan 26, 2023
Adam Siebers, Assistant Revisor, provided an overview for HB2041 noting the bill would provide for a sales tax exemption made by a not-for-profit corporation that is exempt from federal income taxation pursuant to section 501(c)(3) of the federal internal revenue code of 1986 and operates a theater in the state of Kansas. (Attachment 1) Mr. Siebers stood for questions from Committee members.
In response to a question, Kathleen Smith, KDOR, noted the fiscal note for HB2041 increased from last year due to inflation.
Proponents:
Angela Cassette, Managing Director of Music Theatre Wichita, testified as a proponent noting HB2041 will provide relief from sales tax when goods are purchased to build sets. For 2023, the non-profit theaters have survived and been reinvented through the COVID-19 pandemic closures. It is estimated The Music Theatre Wichita brings in at least $1.8 million per year in new economic activity to Wichita by means of out of state employees who move to Kansas for the summer and those who travel to see the shows. She stated if relieved of the sales tax burden, the savings allows the theater to put 1.0 to 2.0 percent of the annual budget into summer jobs and hiring professional specialists for carpentry jobs, prop shop, and more. Ms. Cassette stood for questions from Committee members. (Attachment 2)
In response to a question, Ms. Cassette stated the approximate $50,000 tax exemption per year is around 1.0 percent of their budget.
Mary Doveton, Executive Director, Theatre Lawrence, testified as a proponent for HB2041 stating Theatre Lawrence operates as a small independent business and is dependent on earned revenue from ticket sales, educational class fees for children and adults, and rentals. Theatre Lawrence pays sales tax on everything it purchases as well as on every ticket it sells noting they pay 10.3 percent in tax on everything bought or sold. (Attachment 3) Ms. Doveton stood for questions from Committee members.
Written testimony was submitted by the following as proponents for HB2041:
Travis Grossman, Theatre Atchison (Attachment 4)
Michael Spicer, Salina Community Theatre, (Attachment 5)
Monte Dibben, Great Plains Theatre, (Attachment 6)
Vicki Brokke, Topeka Civic Theatre, (Attachment 7)
Joan Wagnon, on behalf of the Topeka Performing Arts Center Board of Trustees, (Attachment 8)
Written testimony was submitted by Spencer Duncan, League of Kansas Municipalities as an opponent to HB2041. (Attachment 9)
Committee discussion ensued.
Chairperson Smith closed the hearing for HB2041.
Chairperson Smith adjourned the meeting at 4:00 p.m.
