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Minutes for HB2336 - Committee on Taxation
Short Title
Providing for the apportionment of business income by the single sales factor and the apportionment of financial institution income by the receipts factor, deductions from income when using the single sales factor and receipts factor, the decrease in corporate income tax rates determining when sales other than tangible personal property are made in the state and excluding sales of a unitary business group of electric and natural gas public utilities.
Minutes Content for Wed, Feb 26, 2025
Chairperson Smith opened the hearing for HB2336.
Mr. Siebers, Office of Revisor of Statutes, provided an overview for HB2336 would apportion business income for taxpayers by multiplying the business income by the sales factor and provide for a decrease in corporate income tax rates. (Attachment 9) Mr. Siebers stood for questions from Committee members.
Kathleen Smith, Kansas Department of Revenue, provided an overview on the fiscal note for HB2336 stating the Department is estimating the bill would decrease the State General Fund revenues by approximately $115.7 million in FY2026, $89.9 million in FY2027, and $73.1 million in FY2028. This does not include any corporate rate reduction. Ms. Smith stated to formulate the estimate, the Department looked at the corporate income tax returns for 2021 and 2022 and made assumptions for tax year 2026 and 2027. Ms. Smith stood for questions from Committee members.
Proponents:
Eric Stafford, Kansas Chamber, testified as a proponent for HB2336 that would move Kansas to a single-factor apportionment state for corporate income tax purposes. Over forty states have moved to single factors. Kansas has the three factor formula that is the traditional method using the payroll, the property, and the sales of the company within the state. The formula apportions the income to the state of Kansas and then is assessed 6.5 percent corporate income tax rates on that income. Mr. Stafford stated Kansas is one of six states that currently uses a three factor apportionment. (Attachment 10) Mr. Stafford stood for questions from Committee members.
Written only testimony as proponents for HB2336 was submitted by the following:
Randy Stookey, Kansas Grain and Feed Association, (Attachment 11)
Erin Bower, Hallmark, (Attachment 12)
Alex Orel, Kansas Bankers Association, (Attachment 13)
Renee Hadley, Kansas City, Kansas Chamber of Commerce, (Attachment 14)
David Kensinger, Pfizer, (Attachment 15)
Randy Calgren, Cargill, (Attachment 16)
Opponents:
Written only testimony as opponents for HB2336 was submitted by the following:
Nathan Kessler, Kansas Action for Children, (Attachment 17)
Michael Mazerov, Washington D.C., (Attachment 18)
Chairperson closed the hearing for HB2336.
