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Minutes for HB2442 - Committee on Taxation
Short Title
Removing the line for reporting compensating use tax from income tax returns.
Minutes Content for Wed, Jan 22, 2020
Mr. Siebers provided an overview for HB2442 to remove the line for payment of compensating use taxes on the Kansas individual income tax and remove the item from the instructions beginning in tax year 2020.
Kathleen Smith, Department of Revenue stated HB2442 has the potential to reduce use tax collections by $1.3 million. Of that amount $830,000 would go to the State General Fund, $160,000 to the State Highway fund and $307,000 to local governments. Consumers have the ability to remit on their individual income tax form any sales or use tax on purchases that were made outside of Kansas. The purchases would include those made through remote sellers, purchases made through marketplace facilitators and those made in another state and brought into Kansas where the tax rate in the other jurisdiction was less than the Kansas rates. Kansas law stipulates consumers are responsible for the payment of this tax so by removing the line, those consumers are now losing the ability to report on the individual income tax return.
Representative Mason testified as a proponent for HB2442 noting as a result of the Department of Revenue's notice 19-04 requiring remote sellers doing business in Kansas to collect and remit sales or use tax, inclusion of line 20 on individual's tax return has become unnecessary. The line presents the possibility of double-taxation (Attachment 7).
Chairperson Johnson closed the hearing on HB2442.
Meeting adjourned at 4:15 pm.
Next meeting scheduled for January 27, 2020.
