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Minutes for HB2493 - Committee on Taxation
Short Title
Giving the director of taxation subpoena power for sales tax investigations.
Minutes Content for Wed, Jan 24, 2018
Mr. Wells provided an overview on HB2493 noting the bill would give the Director of Taxation the ability to issue subpoenas and interrogatories when investigating a sales tax return for correctness of the return or the amount of tax due from a person selling tangible personal property or services that are taxed. This power is the same power in regards to income tax returns and would extend it to sales tax. Mr. Wells stood for questions.
Michael Hale, Kansas Department of Revenue testified in support of HB2493 which allows the Department of Revenue to subpoena records and issue interrogatories to conduct sales and compensating tax audits (Attachment 2). Mr. Hale noted the bill adopts language similar to the language in the Income Tax Act which allows the Department of Revenue to perform income tax audits. Mr. Hale stood for questions from the Committee.
In response to questions from the Committee, Mr. Hale noted approximately 21 states currently have subpoena power and the Department of Revenue currently does 200 sales and compensating use tax audits a year.
In response to a questions from Representative Davis, Mr. Hale will provide a list of independent Kansas agencies that have subpoena power.
Daniel Murrary, Kansas State Director, National Federation of Independent Business testified as an opponent to HB2493 (Attachment 3). Mr. Murray stated the NFIB-Kansas opposes the bill because of concerns regarding this practice and what it would mean in the future. The cost at all levels including legal compliance and tax compliance is a problem for small businesses. He noted if the Committee decides to move forward with the bill, they would entertain the option of an amendment which would allow retailers to retain a portion of sales tax collected particularly small retailers. Mr. Murrary stood for questions from the Committee.
Eric Stafford, Kansas Chamber United for Business testified as an opponent to HB2493 (Attachment 4) stating their members were opposed and uncertain as to why the bill is needed. The members felt it defeats the purpose of having an information process at the department level. Mr. Stafford stood for questions from the Committee.
Randy Stookey, Renew Kansas Association submitted written testimony in opposition to HB2493 (Attachment 5)
After asking if there were any other conferees and seeing none, Chairperson Johnson closed the hearing on HB2493.
Meeting adjourned at 4:35 pm.
