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Minutes for HB2013 - Committee on Taxation
Short Title
Discontinuing the imposition of sales tax on cable, community antennae and television services.
Minutes Content for Wed, Jan 29, 2025
Chairperson Smith opened the hearing for HB2013.
Adam Siebers, Office of Revisor of Statutes, provided an overview for HB2013 that discontinues sales tax from being imposed on cable, community antennae and television services (Attachment 1).
Kathleen Smith, Kansas Department of Revenue provided an overview on the fiscal note for HB2013 stating the bill would reduce state revenues by $84.0 million in FY 2026 and of that amount the State General Fund revenues would decrease by approximately $68.9 million and the State Highway Fund $15.1 million. For FY 2027, the impact would increase to $92.6 million and in FY 2028 $93.4 million. Ms. Smith stated to come up with the estimates, the Department reviewed data from actual sales tax collections from the cable and subscription television services. Ms. Smith stood for questions from Committee members.
In response to a question, Ms. Smith will provide the NAICS (North American Industry Classification System) that was used for the Department's estimate of HB2013.
Proponents:
Dayton Murty, Charter Communications, testified as a proponent for HB2013 stating Charter Communications operates in Kansas under the brand name Spectrum and provides cable, video, broadband, voice and mobile services to approximately 118,000 Kansans. He noted currently the cable video services have a sales tax levied against them but streaming services do not. As technology has advanced, there are more customers going over to the streaming services. The competitors have a competitive advantage since they do not have a sales tax on their services. HB2013 levels the playing field, updates the statutes for current conditions and stops the harmful practice of penalizing companies that invest in Kansas for the benefit of Kansans (Attachment 2). Mr. Murty stood for question from Committee members.
In response to a question, Mr. Murty stated their company did an analysis of what the impact would be for their customers if the sales tax was removed noting it would save their customers approximately $5.1 million.
Proponent written testimony for HB2013 was presented by the following:
Derek Hein on behalf of DISH Network and Direct TV, (Attachment 3)
Grover Norquist, Americans for Tax Reform, (Attachment 4)
Neutral:
Neutral testimony for HB2013 was submitted by Jay Hall, Kansas Association of Counties, (Attachment 5)
Opponents:
Mike Taylor, on behalf of Kansas County Commissioners Association, testified as an opponent for HB2013 noting the bill would exempt local sales taxes. Exempting sales tax considered by the Legislature should apply only to the state portion of the sales tax and not eliminate voter approved local sales taxes. He noted the solution would be set the state sales tax rate for exemptions at zero and leave the local rates alone that keeps Kansas in compliance with the Streamlined Sales Tax Agreement (Attachment 6)
Spencer Duncan, League of Kansas Municipalities, testified as an opponent for HB2013 get to a system where many people are paying a little and continue to make tax policy and a few people are paying more. Mr. Duncan requested the Committee to consider the following things to evaluate HB2013:
- What threshold the companies meet to warrant a sales tax exemption.
- A sales tax exemption shifts the burden of filling the revenue loss to property taxes.
- Leave local sales tax levies in place and provide a sales tax exemption from the state levy. (Attachment 7)
Mr. Duncan emphasized the need for a fair tax system with a broader base and questions the purpose of sales tax exemptions. Mr. Duncan stood for questions from the Committee.
In response to a question, Mr. Siebers stated since the locals pick up the state imposition statute, it would flow through and impact the local sales tax authority and impact locals.
Opponent written testimony for HB2013 was submitted by the following:
Tanner Tempel, Deputy State Director AFP-KS, (Attachment 8)
John Idoux, Brightspeed, (Attachment 9)
Chairperson Smith closed the hearing for HB2013.
