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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 Thu, Jan 31, 2019
Chairperson Wagle continued the hearing on SB 22.
Damon Ward, Spirit Aerosystems, spoke in support of the bill. Spirit Aerosystems is growing nationally and internationally but has been in Kansas for 90 years including when they were part of Boeing. Spirit has 12 million square-feet of manufacturing space and 12,500 employees in Wichita, which will increase by 1,400 employees in the near future. The results of the two provisions of the Tax Cuts and Job Act (TCJA) goes against what Kansas has traditionally done with regards to taxing global income. There are many locations who want the jobs and capital investment that Spirit offers and they do consider the tax environment of states when making decisions on where to grow. (Attachment 1)
David Rankin testified as a proponent of the bill. Seaboard Corporation is one of two fortune 500 companies headquartered in Kansas and they have over 800 employees in Kansas. The TCJA distorted the link between federal and state tax. Failure to act would penalize U.S. parent companies who have global operations and would result in a tax increase to these companies. (Attachment 2)
Fred Nicely stood in favor of the bill. The federal Tax Cuts and Jobs Act resulted in a significant tax rate decrease at the federal level but did not have the same impact at the state level and his organization estimated that the Kansas corporate tax base would expand by 11%. This bill would reverse unfair and harmful results at the state level and would encourage companies to continue to do business in Kansas as well as encourage new businesses to come to Kansas. Mr. Nicely responded to questions from Committee members. (Attachment 3)
Written testimony in support of the bill was submitted by:
Casey Mussatto, Kansas Beer Wholesalers Association (Attachment 4)
Mark Bolt and Damon Young, Mahaney Roofing Company (Attachment 5)
Randy Stookey, Kansas Grain and Feed Association (Attachment 6)
Kevin Walker, Overland Park Chamber of Commerce (Attachment 7)
Melissa Liby, Bombardier (Attachment 8)
Dan Watkins, Walser and Wichita Chamber of Commerce (Attachment 9)
Jeff Glendening, Americans for Prosperity (Attachment 10)
Tim McKee, Olathe Chamber of Commerce (Attachment 11)
Michele Wheeler, NextEra Energy (Attachment 12)
Dan Murray, National Federation of Independent Businesses (Attachment 13)
Nancy McLernon, Organization for International Investment (Attachment 14)
Andrew Philips and Steve Wlodychak, State Tax Research Institute (Attachment 15)
Written only testimony in opposition to the bill was submitted by Emily Fetsch, Kansas Center for Economic Growth (Attachment 16)
Written only testimony neutral to the bill was submitted by:
Mark Desetti, Kansas National Education Association (Attachment 17)
Mark Tallman, Kansas Association of School Boards (Attachment 18)
Kathleen Smith, Kansas Department of Revenue, responded to questions from Committee members.
Michael Hale, Department of Revenue, responded to questions from Committee members.
There being no further conferees, Chairperson Wagle closed the hearing on SB 22.
