Kansas Chamber’s new tax report finds problems in tax policy

Capitol Bureau

TOPEKA, Kan. (KSNT) – The Kansas Chamber released the “Kansas Tax Modernization” Report on Tuesday. This report, in collaboration with the Tax Foundation, found significant problems in the state’s tax policy and recommended changes be made.

The changes recommended include corporate income tax, individual income tax, state and local sales tax, property and related taxes, and other tax and revenue considerations.

“The Tax Foundation, all they think, live, and breathe is tax policy, so they are the experts on having a tax code in the state that promotes economic growth but that is neutral,” said Chamber President and CEO Alan Cobb. “That doesn’t treat taxpayers differently.”

The changes recommended in the report will spur economic growth and increase jobs and income, by encouraging businesses to invest and expand in Kansas, Cobb said.

The four major changes included in the report include:

  • Remove International Income from the Tax Base. Kansas is currently poised to tax international income, with corporations potentially facing significant in-state liability for the activities of their foreign subsidiaries or related corporations. This would make Kansas far less attractive to multinational corporations.
  • Allow an Independent Choice of Itemization. Kansans should be allowed to itemize on their state return even if they claim the standard deduction on their federal return.
  • Remove Barriers to Interstate Commerce. Policymakers should enact legislation providing a safe harbor for remote sellers, disavowing retroactive collections, providing clear statutory language regarding marketplace facilitators, and eliminating Kansas’ legally dubious click-through and affiliate nexus provisions.
  • Direct County Appraisers on Proper Methodologies for Appraising Big-Box Retail Properties. The Kansas Board of Tax Appeals and Supreme Court have consistently ruled that retail properties should be appraised on the value of their land and improvements and that appraisal formulas should not be based upon the income-potential or lease-potential of a retail property. The Director of the Division of Property Valuation should provide clear guidance to county appraisers for valuing big-box retail properties.

The report will be given to the Legislature to consider during the 2020 session, but this is a long-term plan to be discussed over several sessions, Cobb said.

The full report can be found on the Tax Foundation’s website.

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