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Minutes for HB2388 - Committee on Taxation
Short Title
Kansas corporation NOL carryforward and addition and subtraction modifications for property depreciation.
Minutes Content for Mon, Mar 18, 2019
Adam Siebers, Assistant Revisor, provided an overview on HB2388 stating the bill would allow a taxpayer to make an election to add the bonus depreciation deduction amount to income for Kansas corporation income tax purposes beginning in tax year 2018. The bill also provides a taxpayer's net operating losses can be carried forward up to ten tax years following the taxable year of the net operating loss.
Proponents:
Larry Weians, Vice President, Sprint Corporation, testified as a proponent stating the proposed tax changes in HB2388 are necessary to ensure that Kansas taxpayers are not disadvantaged by certain tax provisions that were included in the federal Tax Cuts and Jobs Act of 2017 (Attachment 1).
Eric Stafford, Kansas Chamber, testified as a proponent to HB2388 stating the tax foundation has historically viewed the Kansas corporate tax climate was uncompetitive compared to other states. He commented Kansas has had a ten-year carry forward standard whereas thirty-two other states have had a 20-year standard before the federal Tax Cuts and Jobs Act of 2017 (Attachment 2).
Written testimony was submitted by John Idoux, CenturyLink, as a proponent for HB2388 (Attachment 3).
Kathleen Smith, Department of Revenue, provided an overview of the fiscal note for HB2388 stating the bill would reduce the State General Fund revenue beginning in FY2020; however, the Department does not have data to make a precise estimate of the fiscal effect. She commented the policy change for Kansas corporation taxpayers to opt out or decouple from the provision if it decreases the taxpayers' total tax liability has the potential to reduce future State General Fund collections. She noted the Department does not have data to estimate the number of taxpayers who would choose this election or the amount of taxes that would be saved or increased by corporation income taxpayers. She stated the fiscal impact for the provision to extend the carry forward period from 10 to 20 years would be a negative $500,000.for FY2020, a negative $1.0 million in FY2021, and negative $1.6 million in FY2022.
Hearing closed for HB2388.
