House Status:
Senate Status:
Senate Status:
Minutes for HB2110 - Committee on Taxation
Short Title
Allowing single sales factor apportionment of business income for certain taxpayers.
Minutes Content for Tue, Jan 31, 2023
Chairperson Smith opened the hearing for HB2110.
Mr. Siebers provided an overview for HB2110 that would allow a taxpayer to elect to apportion income based on a sales factor rather than the current three-factor apportionment. (Attachment 13) Mr. Siebers stood for questions from Committee members.
Kathleen Smith provided an overview on the fiscal note for HB2110 estimating it would decrease the State General Fund revenues by $21.9 million in FY 2024, $22.5 million in FY 2025, and $23.2 million in FY 2026. Ms. Smith stated to formulate the estimates, the department reviewed data on the apportionment of the business income from the top 600 businesses that had a large amount of income and found that approximately 200 filers would be able to benefit from making the election to the single sales factor apportionment for business income. Ms. Smith stood for question from Committee members.
Proponents:
Eric Stafford, Kansas Chamber, testified as a proponent for HB2110 stating when the membership launched the Vision 2025 plan the emphasis on policies was to encourage economic development and investment by private industry. There are 40 states in total that have some form of single-factor apportionment and Kansas is one of six states to maintain the current 3-factor approach. Mr. Stafford noted not all of the membership was unanimous on the bill; therefore, HB2110 was crafted to make it the election of the taxpayer. Companies with capital intensive operations, such as manufacturing, will incur a higher tax burden in Kansas compared to the 40 states that adopted the single-factor approach that only focuses on sales,or a three-factor approach with a heavily weighted sales factor. (Attachment 14) Mr. Stafford stood for questions from Committee members.
Written testimony was submitted by the following as proponents for HB2110:
Michele T. Wheeler, Nextera Energy, (Attachment 15)
Kevin Walker, Overland Park Chamber, (Attachment 16)
Randy Stookey, Kansas Grain and Feed Association, (Attachment 17)
Jason Watkins, The Chamber of Commerce, Wichita, (Attachment 18)
Patrick Fucik, T-Mobile, (Attachment 19)
Erin Brower, Hallmark Cards, Inc. (Attachment 20)
Hans Kabat, Cargill Protein North America, (Attachment 21)
Daniel Silva, KCK Chamber, (Attachment 22)
Written testimony was submitted by the following an an opponent for HB2110.
Emily Fetsch, Kansas Action for Children, (Attachment 23)
Chairperson Smith closed the hearing for HB2110.
Chairperson Smith adjourned the meeting at 4:35 p.m.
