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Minutes for SB22 - Committee on Senate Select Committee on Federal Tax Code Implementation
Short Title
Kansas itemized deductions, election, providing for deferred foreign income, global intangible low-taxed income, business interest, capital contributions and FDIC premiums income tax modifications.
Minutes Content for Tue, Jan 29, 2019
Chairperson Wagle opened the hearing on SB 22. Adam Siebers provided an overview of the bill.
Eric Stafford, Kansas Chamber of Commerce, testified in support of the bill. Passage of the federal Tax Cuts and Jobs Act (TCJA) will result in a tax increase on individuals and corporations in Kansas unless the State takes action. The timing for passing this bill is important due to filing deadlines. Mr. Stafford included a proposed amendment in his testimony. (Attachment 1)
Scott Roberti, Ernst and Young, spoke as a proponent of the bill and provided a brief overview of the Ernst and Young presentation. (Attachment 2)
Brian Liesmann, Ernst and Young, provided an overview of the Kansas tax structure as it is today including tax base construction, taxation of corporate dividend income and apportionment methods. Mr. Liesmann responded to questions from Committee members.
Scott Roberti continued with a discussion of the key TCJA provisions for multinational corporations. Congress determined that lowering the corporate rate and moving to a territorial system would generate economic growth, which is hindered by the current noncompetitive tax code. The TCJA was designed to favor U.S. employment and investment, however states are not permitted to favor domestic commerce over foreign commerce. Their analysis indicated that if states do nothing companies would, on average, see a 12 percent tax increase. Some states have decoupled and others have reduced rates in response to the TCJA. Mr. Roberti responded to questions from Committee members.
Chairperson Wagle continued the hearing on SB 22.
Chairperson Wagle adjourned the meeting 10:26 am. The next meeting will be January 30, 2019.
