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Minutes for HB2513 - Committee on Taxation
Short Title
Requiring marketplace facilitators to collect and remit sales, use and transient guest taxes from sales made through their platforms; removing click-through nexus provisions.
Minutes Content for Mon, Feb 10, 2020
Adam Siebers provided an overview for HB2513 stating the bill would provide a requirement for marketplace facilitators to collect and remit sales tax on behalf of the marketplace sellers who are using the marketplace facilitator set-up. HB2513 sets out the framework requiring the collection and remittance of sales tax and includes the $100,000 threshold for the market place facilitator.
Kathleen Smith provided an overview on the fiscal note for HB2513 stating it is estimated to increase the state revenues by $30.4 million in FY2021. The State General Fund is estimated to increase by $25.4 million in FY2021 and the State Highway Fund is estimated to increase by $5.0 million in FY2021. The start date would be July 1, 2020.
In response to a question, Ms. Smith will provide a response regarding how cities receive the online sales tax or remote tax from multiple cities that share a post office and zip code
Eric Stafford, Kansas Chamber testified as a proponent for HB2513 that requires marketplace facilitators to collect and remit sales tax to the State of Kansas when annual sales into the state exceed $100,000. The Tax Foundation presented the Wayfair checklist and the importance of having compliance issues. He noted Kansas is a participating state of the streamlined sales. In August of 2019, the Governor of Kansas issued an executive order to require all out-of-state retailers to collect and remit sales tax to the state. He stated the problem with the order is there is no de minimis threshold which puts the state at risk. Most states are adopting the $100,000 level. He noted the Kansas Chamber's preference is to keep this proposal revenue neutral and buy down rates with revenue generated by online sales (Attachment 3).
Trey Cocking, League of Kansas Municipalities testified as a proponent for HB2513 that would require any marketplace facilitator receiving gross revenues of more than $100,000 from the state to collect the state and local retail and use tax and remit to the Kansas Department of Revenue. He noted Cyber Monday of 2019 was up again by almost a billion dollars in sales which is a 354% increase in sales since 2014 (Attachment 4).
Scott Schneider, Kansas Restaurant & Hospitality Association testified as a proponent for HB2513. He stated the main reason for the support of this bill is the transient guest tax is included in HB2513. Kansas Restaurant & Hospitality (Attachment 5).
Divyesh Patel, Topeka Lodging Association testified as a proponent for HB2513 noting the AIRBNB has grown to an estimated $38 Billion. The Topeka Lodging Association is requesting the lodging industry and AIRBNB to be on equal footing and the state as a regulator should either tax both or tax neither (Attachment 6).
Robert Bergquist, Topeka Lodging Association testified as a proponent for HB2513. The AIRBNB has grown to an estimated $38 Billion and competing with both economy hotels and luxury hotels. Both industries should be either taxed or not taxed which would be a step to level the competitive field (Attachment 7).
Alex Clayton, a Topeka hotellier and a member of the Topeka Lodging Association testified as a proponent for HB2513 noting the importance of the transient tax and the positive impact on the travel and tourism industry. He stated as benefactors of the use of transient guest tax dollars, hundreds of AIRBNB properties across the state are able to host travelers without contributing their share in tax dollars (Attachment 8).
Written only testimony as a proponent to HB2513 was presented by:
Jay Hall, Kansas Association of Counties (Attachment 9).
Kelly Peetoom, Travel Industry Association of Kansas (Attachment 10).
Tim McKee, Olathe Chamber of Commerce (Attachment 11).
Kevin Walker, Overland Park Chamber of Commerce (Attachment 12).
Mick Koss, City of Overland Park (Attachment 13).
Written only testimony as neutral to HB2513 was presented by:
Michael Austin, Kansas Policy Institute (Attachment 14).
Samuel G. MacRoberts, Kansas Justice Institute (Attachment 15).
In response to a question, Michael Hale, Kansas Department of Revenue addressed two primary concerns regarding NCSL and Telecoms and how they were pursing language. They had two primary concerns.
1) Their mere advertising would bring them within the realm of being required as a facilitator. In Kansas mere advertising is not subject to taxation; therefore, would not be brought in.
2) NCSL and Telecoms did not want a marketplace facilitator to remit sales tax on one transaction while the Telecoms still had to remit other fees such as 911 fees. He noted the bill Representative Warfield introduced last year was that any taxes or fees due on a transaction would be required to be collected and remitted by the facilitator. The taxes and fees come to the Department of Revenue and are disbursed out. The issue the Telecoms had was addressed.
He noted the language if the sellers are already registered the facilitator does not have to collect and remit which goes against the idea of a facilitator bill.
Hearing closed for HB2513.
