Monday, December 22, 2014

TYSON: State Senate action touches taxes, raffles

By CARYN TYSON, Kansas State Senator | 4/14/2014

The last week of the regular legislative session included several bills that passed the state Senate.

Tax law, penalty changes

House Bill 2557 started out as legislation that would allow a 30-day window for a taxpayer to pay without penalty additional taxes when the taxman sends notification the taxpayer owes more. Presently, they don’t have the 30 days to make the payment without penalty. The bill would not change the penalty, which is 50 percent of the balance due.

Under the present tax code, individuals who have a loss on their Schedule C, E or F forms cannot take a loss on their state tax forms, even though they can take them on the federal forms. HB 2557 was amended by the Senate to include language that would allow Kansas taxpayers who file a federal 1040 Schedule C, E or F form(s) and have a loss to take up to $25,000 in losses for an individual or $50,000 if married filing jointly. Many Kansas taxpayers have been taken by surprise by the statute that took effect for tax year 2013 that doesn’t allow the deduction on state income taxes. If HB 2557 is to become law with the existing language, 2013 taxpayers could file an amended tax return, otherwise it is a tax increase on Kansas small businesses. To become law, the bill will have to gain support with the House and the governor. HB 2557 passed the state Senate on a bi-partisan 25-12 vote. I supported the bill and the amendment.

Property taxes

Another tax issue before the Legislature deals with property taxes. Two counties in the state hired an out-of-state appraiser to assess property taxes on large commercial industrial property. As a result, a fertilizer plant in Montgomery County and a cement plant in Neosho County have received exorbitantly high tax bills. The fertilizer plant was expecting a $400,000 property tax bill after their property tax abatement expired and instead was stuck with a $10 million tax bill. Both companies have challenged their property tax assessments in court. Representatives from all sides have been working on language and agreed on the original language in HB 2643 insuring this will not become a problem in other counties. The bill also would put guidelines for the Property Valuation Division (PVD) regarding classifying personal property.

In a surprise action, the bill was amended on the Senate floor to exclude private health clubs from all property taxes. I voted against the amendment (for the second time) and do not support this legislation. However, the amendment passed 21-17. The purpose of HB 2643 was to prevent Kansas businesses from paying an exorbitant amount in property taxes because of misclassification and avoid future lawsuits. It was important to pass the main part of this legislation before other counties with these large commercial operations are negatively impacted. I voted yes and the bill passed on a 29-8 vote. This is a good example of a bill that has some things I do not favor but the overall purpose of the bill is important to pass.

Teachers’ due process

The education funding bill (Senate Sub for HB 2506) that passed appropriated about $126 million to equalize school funding, including $78 million that could be used in property tax relief. However, the main topic of discussion has been an amendment that would remove state mandated teacher tenure and give local school districts the ability to make employment decisions, including to have tenure or not. Teachers would still have due process when their Constitutional rights have been challenged.

On the ballot: Raffles

Raffles now are considered gambling, which makes it illegal to hold raffles in Kansas. The House and Senate passed a legislation allowing voters to decide on the issue with a Constitutional Amendment. On the November ballot, as a Kansas voter, you will be able to mark the ballot for or against a Constitutional change that would allow churches, veteran’s organizations, charities, and other non-profits to legally hold raffles. The Constitutional Amendment would restrict the number of raffles per year and ban electronic gaming or vending machines selling raffle tickets.


Caryn Tyson, R-Parker, represents Franklin County and the 12th District in the Kansas Senate.

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