Category: Gov. Laura Kelly

Kelly goes shopping for sweet food sales tax repeal, settles for gradual reduction

Bill to be signed by governor ends 6.5% state tax on groceries in 2025

by Tim Carpenter, Kansas Reflector

Olathe — Gov. Laura Kelly planned a trip to a Hy-Vee store in Olathe to sign a bipartisan bill Wednesday phasing out over three years the state’s 6.5% sales tax on groceries, but would prefer the Legislature reconsider her proposal to promptly wipe out the state tax on groceries.

The Republican-led Legislature is sitting on a large budget surplus, but has been wary of wholesale deletion of the state’s tax on food on July 1 because it would be a political victory for the Democratic governor and the lost state revenue could haunt lawmakers in a recession. The governor has campaigned to “Axe the Food Tax,” which would be popular among consumers grappling with the highest inflation rate in decades.

Instead, the House and Senate overwhelmingly approved a bill that would culminate with repeal of the state’s food sales tax in 2025. The reform wouldn’t alter local sales tax on grocery purchases.

Under House Bill 2106, the state would lower the state’s sales tax on groceries to 4% on Jan. 1, 2023. It would slide to 2% by Jan. 1, 2024. The tax would be eliminated Jan. 1, 2025. The first phase of the rollback would cost the state $77 million. The second year revenue reduction would be an estimated $252 million, followed by $411 million in 2025.

Gov. Kelly referred to the Legislature’s alternative to her plan as a “good first step,” because it would deliver savings for every Kansan. She said strong state tax revenue collections in April demonstrated the Legislature could take up the issue May 23 when legislators return to Topeka.

House Majority Leader Dan Hawkins, R-Wichita, said an extreme downturn in the state’s economy had to be anticipated. The stair-step process of lowering the sales tax on groceries would allow the Legislature to remain nimble, he said.

The bill to be signed by Gov. Kelly defined food as standard groceries as well as bottled water, candy, dietary supplements, soft drinks and food sold through vending machines. It excluded alcoholic beverages, tobacco and prepared food offered by restaurants.

The unusually high statewide sales tax on groceries was raised to 6.5% in 2015. It was bumped up to help balance the budget because former Gov. Sam Brownback’s strategy of aggressively lowering the state’s income tax — his goal was to eliminate that tax in Kansas to create job growth — depleted the state treasury to an extent it was difficult state government to fulfill basic duties.

In 2019, Republicans in the Legislature passed two tax-cut bills vetoed by Gov. Kelly. GOP lawmakers attempted to induce Gov. Kelly to approve of the cuts by inserting a reduction in the state food sales tax. Gov. Kelly rejected the legislation, saying it would have been irresponsible to add financial instability to the budget.

Derek Schmidt, the attorney general and a candidate for governor in 2022, said the latest phased approach to the sales tax on groceries was Gov. Kelly’s “second chance to get it right.”

Kansas Reflector stories, www.kansasreflector.com, may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0.
See more at https://kansasreflector.com/2022/05/11/kelly-goes-shopping-for-sweet-food-sales-tax-repeal-settles-for-gradual-reduction/

A Kansas sheriff’s office is raiding shops that sell THC and seizing the products

Law enforcement officers are carrying out raids in Topeka on shops selling cannabis products.

by Celia Llopis-Jepsen, KCUR and Kansas News Service

The Shawnee County Sheriff’s Office won’t answer questions about how many stores it has raided, on what dates or how much it seized.

Cannabis advocacy groups in Topeka say officers seized goods from several sellers on April 20 — a date celebrated by cannabis enthusiasts — and April 28, and continued their campaign over the past few days.

The move frustrates advocates holding out hope that the Kansas Legislature will take final steps later this month to seal a deal that would legalize medical marijuana.

The raids also frustrate advocates because some cannabis products already count as legal under state law.

“This ongoing persecution of Kansas citizens, retailers, distributors and ancillary business owners is detrimental to our state and its future, and it must end,” several groups said in a collective statement.

The groups — including Kansans for Hemp, the Kansas Cannabis Chamber of Commerce and the Kansas Cannabis Coalition — urged the hundreds of shops across Kansas that sell products containing THC to ensure their goods are legal and to keep detailed documentation of their origin to gird themselves against prosecution.

THC is the key psychoactive compound in cannabis plants. Kansas law allows products with very small amounts of it. To be legal, the small amounts of THC need to come from industrial hemp plants — cannabis plants that naturally contain low levels of the stuff.

In December, Attorney General Derek Schmidt concluded these rules apply to delta-8 products, too. Delta-8 really only sells well in states like Kansas, where full-blown recreational cannabis remains illegal. It is a molecular variation on standard THC with similar psychoactive effects.

The Shawnee County Sheriff’s Office says it found stores selling illegal goods — some with standard THC and some with molecular variations. It won’t answer questions about how it determined, or will determine, which of the products broke state law. To be legal, the products must contain less than 0.3% of THC or THC variations, and the substances must come from industrial hemp plants.

Earlier this year, the Ellis County county attorney told shops selling delta-8 in Hays that they wouldn’t face prosecution if they handed the products over to police voluntarily.

That county also successfully prosecuted what may be the first criminal case in Kansas that involved delta-8. Prosecutors relied on manufacturer documentation that indicated the products contained more than 0.3% of the delta-8 THC variety.

Kansans for Hemp says it knows of at least four stores in Topeka that were visited by law enforcement last month and this month. Officers went in and confiscated goods.

Store owners were told that their products were unlawful unless the Kansas Legislature changes state law.

Thirty-seven states now allow medical marijuana, the National Conference of State Legislatures says. Eighteen of them also allow recreational use.

In its most recent annual survey of Kansas public opinion, Fort Hays State University found 70% of respondents favored legalizing marijuana so the state can tax it.

Social media posts on the Shawnee County Sheriff’s Office Facebook page normally draw few public comments. But when the agency announced that it had executed warrants against an unspecified number of shops and seized products containing THC, it attracted nearly 160 comments, almost all of which criticized the action.

“You wasted tax money on this? Low hanging fruit much?” one commenter wrote. “Aren’t there real criminals out there you should be worried about?”

Another likened the raids to a “countywide crackdown on jaywalkers.”

Celia Llopis-Jepsen reports on consumer health for the Kansas News Service. You can follow her on Twitter @celia_LJ or email her at celia (at) kcur (dot) org.
The Kansas News Service is a collaboration of KCUR, Kansas Public Radio, KMUW and High Plains Public Radio focused on health, the social determinants of health and their connection to public policy.
Kansas News Service stories and photos may be republished by news media at no cost with proper attribution and a link to ksnewsservice.org.
See more at https://www.kcur.org/news/2022-05-04/a-kansas-sheriffs-office-is-raiding-shops-that-sell-thc-and-seizing-the-products

Kansas collects $176.3M more than expected in April taxes

by Sherman Smith, Kansas Reflector

Topeka — Kansas tax collections for April exceeded forecasts by $176.3 million, the state announced.

The surplus mostly came from high-than-expected individual income tax returns, which beat revenue projections. Those projections had just been adjusted April 20 by $178 million. The roughly $1 billion collected in individual income taxes was more than double the $487 million collected in April 2021.

Gov. Laura Kelly said the revenue figures indicate the state can afford to immediately begin to reduce the 6.5% state sales tax on food. Previously, she said she will sign legislation passed last week that would lower the tax rate in January and phase it out completely by 2025.

“These tax collection receipts reiterate the state’s fiscal health, and clearly shows we can afford to move up the ‘axe the food tax’ implementation date to July 1 of this year,” Gov. Kelly said. “I’m calling on the Kansas Legislature to do so as soon as they come back later this month.”

The Legislature is scheduled to return May 23.

Retail sales tax collections also exceeded revenue projections by $8.7 million, while other streams of revenue fell short of the estimate — including the compensating use tax paid by out-of-state retailers, which came up $7.5 million short.

Liquor, gas and oil excise taxes were down a combined $2.3 million from the estimate. Agency earnings were down an additional $2.3 million.

Kansas Reflector stories, www.kansasreflector.com, may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0.

See more at https://kansasreflector.com/briefs/kansas-collects-176-3m-more-than-expected-in-april-taxes/