Tim Carpenter, Kansas Reflector
Kansas House passes telecom sales tax exemption, blocks residential property tax break
Rep. Brian Bergkamp, R-Haysville, seen during a March 2021 committee hearing, convinced the House to pass a bill delivering a sales tax exemption on equipment purchases by the telecommunications industry. Two dozen states have comparable laws, and if implemented in Kansas it would cost the state about $17 million annually. (Sherman Smith/Kansas Reflector)
TOPEKA — The Kansas House approved a $17 million sales tax exemption on equipment purchases by telecommunication companies after rejecting amendments to exclude hygiene products from the state’s 6.5% sales tax and to increase an exemption on state property tax collected to finance K-12 public schools.
The House also sent the Senate a bill Thursday requiring counties to alter annual property tax notices to include information about the previous four tax years rather than a single year. Another bill moved across the Capitol rotunda would require the state to pay for mailing notices to taxpayers when a county intended to raise more tax revenue.
Haysville Rep. Brian Bergkamp, who described himself as a skeptic of sales tax breaks, said a sense of fairness compelled him to speak up for House Bill 2106’s concession to the telecommunication industry. Kansas chose not to assess a general sales tax on business-to-business machinery and equipment transactions, he said, but that treatment hadn’t been extended to communications companies.
He said 24 states had a comparable sales tax exemption for equipment acquisitions by telecommunication businesses.
“Some of you might be asking, ‘Why in the wide world am I up here talking about a sales tax exemption?'” Bergkamp said. “To me, one of the most important things we can do as a body is to create fairness across the playing field. It’s about creating parity across different industries.”
Rep. Randy Garber, a Sabetha Republican, said he understood reasoning for the new exemption, but was weary of steady growth in the state’s roster of sales tax exemptions. He said exemptions from sales tax cost the state treasury an estimated $8 billion annually.
“Now, we’re going to add another one,” Garber said. “When are we going to stop giving sales tax exemptions to just a certain group of people?”
To punctuate the point, Garber proposed an amendment setting a five-year expiration date on the telecommunication sales tax exemption. The House approved his idea 64-47, despite arguments the industry’s timeline for infrastructure projects extended went well beyond five years and a 2028 expiration would be a nuisance for the industry’s lobbyists.
Rep. Vic Miller, D-Topeka, was unable to convince the Kansas House to support a $20 million state sales tax exemption on hygiene products and expansion of a residential property tax exemption tied to state funding of K-12 public education. (Sherman Smith/Kansas Reflector)
Property, sales tax ideas
The GOP-led House rejected the $20 million sales tax exemption on hygiene products sought by Rep. Vic Miller, D-Topeka. He said tax relief approved by the Legislature ought to be directed at people who would benefit most from changes in the tax code.
Miller also was rebuffed when he proposed an amendment to House Bill 2201 that would raise the exemption on residential property taxes assessed to finance K-12 public schools.
The state collects a 20-mill tax for education. For years, the first $20,000 of a home’s valuation was exempted. The 2022 Legislature doubled the exemption to $40,000. In his amendment, Miller wanted to boost the exemption to $65,000.
The House didn’t have a chance to vote on Miller’s property tax relief idea because a parliamentary maneuver led to a ruling the amendment wasn’t germane to the underlying bill.
Rep. Francis Awerkamp, R-St. Marys, said House Bill 2201 would simply require annual property valuation notices to include appraised and assessed values for each property for the current year and the previous four years. County officials are currently required to provide information on the current and last tax year.
“It’s a decent amount of information for the property owner just so they can better see the trends over five years,” Awerkamp said.
Miller, in collaboration with other House Democrats, complained Republicans were tone deaf to spiking home property tax valuations in Kansas. Here are average increases for selected counties: Wallace County, 20%; Leavenworth County, 14.8%; Shawnee County, 13%; Johnson County, 12%; and Douglas County, 9%.
“I am certain my colleagues across the aisle are hearing from their constituents about property valuations just as much as I’m hearing from mine, if not more,” Miller said.
The House approved a bill advocated by Rep. Brett Fairchild, R-St. John, that shifted the burden of paying for notices to taxpayers whenever county governments wanted to raise property taxes
Existing law required the state pay printing and postage costs of notifications in tax years 2022 and 2023. The bill would permanently place responsibility with the state government for the estimated $1.3 million annual cost of the notices, he said.
More than 100 House members voted for that bill, but Topeka GOP Rep. Ken Corbet said the state was sending counties the wrong message by picking up the tab for mailings related to county plans to hike spending. The idea for the disclosure law, he said, was to put pressure on counties to contain expenditures.
“Whoever in the county that busts that line should pay for the mailing,” Corbet said. “It’s silly for us to reward people in the county for raising your taxes.”
This article was used by permission from the Kansas Reflector. The Kansas Reflector is a non-profit online news organization serving Kansas. For more information on the organization, go to its website at www.kansasreflector.com.