Governor’s Tax Council considers taxing exempt services

Capitol Bureau
State drops the ball falling nearly $7M on tax collection

TOPEKA, Kan. (KSNT) – The Governor’s Council on Tax Reform met on Friday to hear recommendations from the Tax Policy Center and Tax Foundation.

Among those recommendations were creating a sales tax on services that otherwise would be exempt, including ones performed at barbershops, beauty and nail salons and other personal care services.

“I think that it’s worthwhile to look at exemptions,” Steven Morris, co-chair of the council and former senator, said. “We have two dogs and we pay sales tax on grooming those dogs, but we don’t have to pay sales tax when we get our own hair cut.”

This would be estimated to create an additional $50 million in revenue in the state, however, Morris said this would not be enough for the state’s budget.

The last time legislators attempted to do this was in 2017 in HB 2384. The bill quickly died on the House floor.

“It’s always a good idea to broaden the base, but every time you broaden the base you have a constituency who doesn’t want to pay taxes,” said Donna Ginther, director of The Institute for Policy and Social Research and economics professor at the University of Kansas.

The committee will meet again in May or June to decide whether to recommend taxing these services for Governor Laura Kelly.

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