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  • 30 Jun 2017 4:15 PM | Anonymous

    Impact of Changes to Kansas Income Tax 

    The Kansas Department of Revenue has issued new notices regarding changes in tax rates and policies in effect July 1, 2017, as a result of the passage of Sub for SB 30 by the 2017 Kansas Legislature.  The 2017 session was all about filling a budget hole and Kansas businesses and individuals are affected immediately.

    The rate increases are retroactive to January 1, 2017, which means that businesses and individuals should begin as soon as possible to withhold or set aside the necessary funds for Kansas income taxes.

    Sub for SB 30 reinstates taxes on non-wage income for small businesses and raises rates for individual income taxes for 2017 and again in 2018.  It also divides taxpayers into three brackets, instead of two.  The income tax rates were not raised to pre-2012 rates, but will result in smaller paychecks for Kansas employees. 

    Department of Revenue Notices:  https://www.ksrevenue.org/prnewtaxnotices.html 

    The Kansas Department of Revenue has released new tables for employers to increase withholdings beginning on July 1 to match 2018 rates.

    In a statement, the agency said it is using the 2018 rates in its tables for 2017 to “ensure that enough income is withheld from paychecks to catch up for the increased and backdated tax liability in the second half of the year, and also to provide certainty for Kansas employers.”  Read more at Kansas.com here:  http://www.kansas.com/news/politics-government/article158628974.html 

    Employers are asked to begin withholding at the higher rate as of July 1.  Read the notice:  https://www.ksrevenue.org/taxnotices/notice17-02.pdf.  Find the new withholding tables here:  https://ksrevenue.org/forms-btwh.html

    Non-wage income filers, such as sole proprietors or LLC owners, are asked to begin making estimated payments immediately-  https://ksrevenue.org/pdf/k-40es17.pdf - although penalties will not be assessed now. 

    Additionally, the 2018 due dates for remitting withholding tax to the state and for notifying employees of taxes withheld have changed from the last day of February to January 31.  



  • 30 Jun 2017 3:12 PM | Anonymous

    Legislature Adjourns Sine Die 

    On Monday, the Legislature returned to Topeka for Sine Die, the ceremonial last day of the 2017 Legislative Session.  The Senate met for less than 15 minutes and the House for less than one hour, both adjourning before noon.

    There were no veto override efforts.  House Minority Leader Jim Ward, D-Wichita, hoped to override Governor Brownback's line item veto of a budget proviso relating to disability waivers, but the Senate met and adjourned quickly.  There did not appear to be enough House members present to be successful.

    Jason Probst (D-Hutchinson) was sworn in to replace Patsy Terrell, who passed away suddenly during the veto session. 

    John Wilson (D-Lawrence) announced his retirement from the House - saying that his young family and career needed his attention.  Said Wilson, "Now is actually a really great time to be in the Legislature. It's just not a really great time for me." 

    Some believe that the Legislature will need to return for a special session after the Supreme Court reviews the new school finance plan, but others believe it will satisfy the court's concerns.

    Governor Brownback vetoed Sub for HB 2313 – the lottery vending machine bill that included funding for mental health programs.   Read the Governor’s Veto message.  It is interesting that the Governor vetoed a bill that his appointed Lottery Director had worked very hard to pass.

    Governor Brownback also vetoed two provisions of the budget bill – both relating to social services under the Kansas Department for Aging and Disability Services.

  • 12 Jun 2017 7:00 PM | Anonymous

    This extended session was all about filling a budget hole, creating a new K-12 Education Finance Plan and changing tax policy.  The Governor's proposal to double liquor enforcement taxes was not approved, but legislators caution that if they are ordered to revisit the 2017 K-12 Education Plan - tobacco, liquor and motor fuel taxes will be likely targets.

    There are some interesting changes in the budget bill.  In addition to the Governor’s proposed budget, HB 2002 includes State Employee Wage Increases of 2.5 percent for all except elected officials and those who have had recent wage increases and 5.0 percent for employees who have not had a wage increase in five years.  Kansas will also open an on-site state employee health care clinic in Topeka at a cost of $2.7 million.

    The Legislature rejected the Governor’s plan to securitize the Children’s Initiatives Fund / KEY fund.  It also rejected the plan to consolidate the Board of Barbering with the Board of Cosmetology, but did agree to merge the Office of the Securities Commissioner with the Insurance Department.

    A number of programs received small funding boosts, including behavioral health, services for persons with disabilities and the senior care act.

    The Legislature also extended the exemption for state mental health hospitals and other public health facilities to continue to ban concealed carry on those premises.  Other public buildings must allow concealed carry or provide armed guards and metal detectors at all entrances in order to assure that no one is carrying guns.  The Governor asked for the exemption for state hospitals, but some think he might veto the bill because it extends to KU medical center and county or city owned health facilities.  (A Governor’s Budget Amendment provided late in the session estimated it would cost over $12.5 million to hire 180 full time employees and buy equipment for the state hospitals in fiscal year 2018.)

    SB 30 is the income tax bill that became certain after the Senate and then the House overrode the Governor’s veto last Tuesday.  The new tax policy does not fully roll back the tax cuts from 2012, but it does remove the LLC exemption and raises income tax rates.  The bill is projected to bring in an additional $582 million in FY 18 and $624 million in FY 19.  However, the budget still requires sweeps from the Kansas Highway Fund, transfers from the Pooled Money Investments Board, and delayed KPERs payments.  There may also be healthy internal borrowing in FY 18 to bolster the reinstatement of the 4% Medicaid cuts that were part of the Governor’s allotments in May 2016.  That funding is to be covered by increased HMO privilege fees, but those fees won’t come in until March 2018.

    On another note, projected receipts from expanded gaming (casinos) are dropping – forecasts were reduced $2.8 m in FY 17, $6.5 m in FY 18, and $7.8 m in FY 19.  The Legislature adopted HB 2313 which will allow for Lottery vending machines, which is expected to increase lottery receipts.  That bill also includes a conference committee amendment permitting fraternal organizations to install pull tab vending machines, also facilitated by the Kansas Lottery.

    Finally, there is a group of legislators – including many Democrats, who believe the new education finance plan passed in SB 19 last Tuesday will not pass Supreme Court scrutiny, and they could be back in Topeka in July for a special session.  That bill spends an additional $186.6 million in FY 18 and $283.8 million in FY 19 to satisfy the Supreme Court decision that K-12 funding is inadequate.

    If you have questions about the budget or any other legislation, feel free to contact Amy.


  • 12 Jun 2017 2:58 PM | Anonymous

    The Kansas Legislature went home Saturday evening after approving Senate Sub for HB 2002 – the conference committee report containing the mega-budget and omnibus budget provisions.  The session lasted 113 days, just one day short of the record session in 2015.

    The House/Senate budget negotiations were rushed this year, with the six members of the Appropriations/Ways and Means budget conference committee meeting every few hours beginning Thursday evening, after the House had adopted its budget bill, and wrapping up around midnight Friday night.

    Legislators return to Topeka June 26 for Sine Die – the ceremonial last day of the session.  They may or may not have any real work to do, depending whether or not Governor Brownback pulls out his veto pen again.  He can line item veto items in the budget bill and some are predicting he will veto HB 2278, "the guns bill", which allows state hospitals and other public health facilities to continue to ban guns on their premises.  It is true that the administration requested the exemption for the state hospitals, but some believe he will oppose extending that privilege to KU Medical Center and other facilities


  • 12 Jun 2017 1:07 PM | Anonymous

    Flags at state government buildings are flying at half-staff in honor of Representative Patsy Terrell (D-Hutchinson).   Rep. Terrell died unexpectedly June 7 in her hotel room in Topeka.  She was found when fellow legislators became concerned that she had not come to the Statehouse for session on Wednesday. 

    Rep. Terrell was new to the Legislature this session.  I and many retailers were very impressed when she was one of the few legislators on the House Commerce Committee to return emails to everyone who communicated with her.   I am grateful to have had the opportunity to get to know her better during the veto session.  Rep. Terrell was enthusiastic and smart, with a bright smile and a quick wit.  She was passionate about representing her constituents.   

    Memorial services have not been set.


  • 06 Jun 2017 10:16 PM | Anonymous

    This week has already seen more action than any other 48 hours of this veto session.  There is now a new tax plan and an education finance plan for Kansas.

    Tonight at 8:05 p.m. the Senate voted to override the Governor’s veto of Sub for SB 30 – the tax legislation that the Legislature came together to pass on Monday.  A veto override requires a 2/3 vote, and the Senate vote was 27-13.    The House voted to override the veto at 9:45 p.m. with a vote of 88-31.   Read a summary of the tax package here – CCR for Sub for SB 30.  It is not a full repeal of the 2012 tax cuts, but does repeal the LLC tax exemption, increase income tax rates, and add a third income tax bracket.  It is similar but not exactly the same as the tax plan the Governor vetoed in February.

    Monday was a very busy day.  First, the House shot down SB 19 the joint tax/education bill that had tied up the Legislature on Sunday.  That proposal only got 32 votes.

    The conference committee then pulled out the tax portion of SB 19 and re-ran it with only the school finance language.  The House adopted the school finance formula 67-55 at 7:00 p.m.

    The Senate later approved the school finance package 23-17.   

    The Tax Conference Committee also crafted an alternative tax plan in the afternoon for consideration Monday evening.  The House adopted that broader tax proposal in the form of Conference Committee Report for Sub for SB 30 and passed it 69-52.

    The Senate adopted the tax package around midnight 26-14 and the Governor’s office wasted no time in putting out the word that he intended to veto it.  Senators immediately worked to find another vote in order to be able to override, and there were several moments on Tuesday when that seemed unlikely.

    On Tuesday, the House and Senate waited until 2:00 p.m. to convene and approved a few conference committee reports approved while everyone waited for the veto message from the Governor – which came down late in the afternoon.

    It was the third late night in a row in the Statehouse and many are encouraged to see the Legislature end their tax stalemate and move forward to develop the FY18-FY19 Budget.

    Senate Omnibus Budget Bill

    The Senate passed it’s omnibus budget bill around 10 p.m. Sunday night on a vote of 27-13. 

    Senate Ways and Means Chairman Carolyn McGinn offered a series of unusual amendments in an effort to – as she described it – allow members of the Senate to have meaningful input into the budget.  She stated that pay-go rules have led to dissatisfaction by many legislators, as most of the budget amendments are created by only committee members.  So, she offered amendments to delete multiple funding provisions including dollars for crisis stabilization centers, mental health centers, wage increases for state employees and waiver direct services rates.  With each proposed amendment, she stated her support for these budget enhancements and said she would vote against the amendments.  As a result, the Senate has verified its support of these enhancements. (These amendments were also unusual because they were mostly amending items that had been approved in SB 189 – the mega budget bill, not HB 2002.)

    There were a few amendments adopted, but the omnibus bill remained essentially the same.

    House Appropriations Committee passed their omnibus bill / mega budget bill after midnight Tuesday night.  The House isn’t expected to run that budget bill until Thursday.  Typically, the conference committee can’t start meeting until that has occurred.  

     


  • 02 Jun 2017 4:11 PM | Anonymous


    KABR has been contacted by a number of retailers who are interested in seeing changes to the rules for wine tastings.  Several stores have asked for the ability to charge for hosting educational tasting events, others would like to be able to charge for wine clubs.  

    If you are interested in exploring possible changes to current rules for conducting wine tastings, please RSVP below to participate in a meeting at 2:00 p.m. Wednesday, June 7, with Debbi Beavers, Director of the Division of Alcoholic Beverage Control and members of the industry.  

    This meeting is open to retailers and industry members, please RSVP here.

    Directions for participation are posted at the link above.

    Contact Amy Campbell if you have questions.

     

      

                                           


  • 26 May 2017 2:23 PM | Anonymous

    After debating a K-12 school finance bill Wednesday evening and passing it on final action vote Thursday - the House and Senate packed up for a four day holiday weekend.  The Statehouse was quiet by 1:00 p.m. Thursday afternoon.

    We expect to see action next Tuesday on a new tax proposal, but can't predict what it may hold.  If you are in contact with your legislators outside of the Statehouse, you can reach out to them before they return on Tuesday.

    Apparently, the Governor has indicated he doesn't want to sign an income tax bill repealing the 2012 tax cuts, but would sign tax increases that include consumption taxes (i.e. sales tax, liquor tax, tobacco tax, motor fuels tax, or repealing sales tax exemptions).   So, the House's last attempt at crafting a new Sub for SB 30 included the income tax increases, repealed some sales tax exemptions, and increased the liquor enforcement tax from 8% to 10%  

    That plan was derailed when the industry protested and a number of the groups whose services were affected spoke out.  In particular, a proposal to remove the sales tax exemption for "companion animal veterinary services" created concerns for Bayer, who makes veterinary pharmaceutical products and whose world headquarters are in Shawnee Mission.  An effort to quickly switch from veterinary services to custom computer software raised opposition from businesses who rely heavily on custom software services, particularly the banks and other financial institutions.

    The services that were included in the Tuesday/Wednesday proposal were: towing, detective services, security guards and patrol services, security system services including locksmiths, non-residential cleaning services, pet care, companion animal veterinary services, mini-self storage, expanded lawn services, personal care services and custom computer software.

    This proposal would also have reduced the food sales tax from 6.5% to 55% in July 2020.  


  • 25 May 2017 7:20 PM | Anonymous

    House Bill 2277 will allow cities and counties to create year-round entertainment areas where alcoholic beverages can be consumed outside of drinking establishments, in common consumption areas.  

    Read a summary of the bill here.

    The bill was passed by the House on Tuesday, May 24, on a vote of 97-22.  The bill was passed and amended by the Senate May 16 35-5 - where it gained a couple of amendments.  

    An amendment by Senator Rob Olson removes the current ten-day waiting period for private club memberships.

    An amendment by Senator Jeff Longbine clarifies that distributors may require minimum order quantities for beer - as passed in the beer bill Sub for SB 13 earlier this session.  The former language allowed minimum orders for alcoholic liquor, which technically include wine and spirits.  This clarifies that ordering rules will not change for wine and spirits.

    The bill now goes to the Governor for his signature or veto.

    Wine Tasting Rules Discussion Scheduled

    There are many retailers who are interested in seeing changes to the rules for wine tastings.  Several stores have asked for the ability to charge for hosting educational tasting events.  

    If you are interested in exploring possible changes to current rules for conducting wine tastings, please contact Amy Campbell here.  We hope to host a meeting to exchange ideas on June 7 in Topeka - so please contact us by June 2.


  • 24 May 2017 3:28 PM | Anonymous

    Tax Debate Set Aside

    The House will not debate the latest version of Sub for SB 30 today, and many say it won't be debated at all.

    We heard this morning that there were problems with the bill and ultimately, the plan to debate taxes today was set aside.  The House went ahead with its debate on K-12 Education, with rumors of 90 amendments in the wings.  Legislative staff have suggested that today's education debate could set a record for amendments drafted.

    At this point, we do not know if it was the liquor enforcement tax that derailed the Tax conference committee report - but hopefully our arguments were persuasive enough to keep enforcement tax increases out of the next tax proposal.

    Rumors have been swirling that House leadership may have told legislators that the liquor industry was in favor of increasing the enforcement tax up to 10%.  It is difficult to imagine this.  Some legislators said they were told it would only affect customers purchasing drinks, i.e. the drink tax.  Also inaccurate. 

    Perhaps the details of liquor taxes have been forgotten since the hearings were held in February, but that is the risk of throwing new items into conference committees that have not passed either chamber.  

    Liquor taxes may or may not be a part of future packages - we will just have to see.  Regardless, we hope that retailers have made certain that their legislators know where they stand - especially those who must compete with Missouri retailers.  

    The increased income taxes that have been a part of virtually every tax proposal this session will already add to the costs of our small businesses - a targeted tax on the products we sell would be piling on.

    Just to be certain, a joint industry letter was circulated to legislators.  Read the contents of that letter below:

    Please Oppose CC Report on SB 30

    The Tax Conference Committee Report on SB 30, adopted last night includes a 25% increase in the liquor enforcement tax – from 8 to 10 percent.     We would urge you to vote NO !!

    1.         After extensive hearings, there was no support in House Tax Committee for an increase in liquor taxes.

    2.         Its inclusion clearly violates Joint Rule 3(f) prohibiting a CC report from including subject matters that have not passed either house.    

    3.         This 25% increase in the enforcement tax would most heavily impact retail liquor stores and particularly those near our borders – stores already heavily impacted by the recent enactment of SB 13.

    Please vote NO!!!!!

    Amy Campbell -   Kansas Assn of Beverage Retailers

    Scott Schneider/Jason Watkins -   Kansas Beer Wholesalers Assn,   Kansas Restaurant & Hospitality Assn

    Whitney Damron -   Kansas Assn for Responsible Liquor Laws

    Brad Smoot -   Distilled Spirits Council 

    Aaron Mays -   Standard Beverage

    Philip Bradley -   Kansas License Beverage Assn,   Kansas Craft Brewers Guild,   Kansas Viticulture and Farm Winery Assn,   Artisan Distillers of Kansas

    Larrie Ann Brown -   Wine Institute

    John Bottenberg -   MillerCoors

    Jim Dorsey -   Southern Glazer’s Wine and Spirits

    John Peterson -   Anheuser-Busch Companies


    **********************************************************
    Contact: Amy Campbell  785-969-1617

     

      

                                           


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