Tag: Food sales tax

Legislature deflects Democrats’ maneuvering on clergy reporting mandate, food sales tax

GOP majorities reject attempts to pull reform measures out of committee

by Tim Carpenter and Noah Taborda, Kansas Reflector

Topeka — Democratic Sen. Tom Holland found little support for a motion Tuesday to bring to the full Senate a resolution stuck in committee that would require religious leaders in Kansas to become mandatory reporters of suspected child abuse or neglect.

Holland, of Baldwin City, found no interest among the Republican supermajority to overrule GOP Senate leadership’s view that the “Stop Protecting Pedophile Priests Amendment” didn’t merit consideration. Holland’s motion, which required 24 votes for approval, failed 10-24.

“For far, far too long the Kansas Legislature has looked the other way while pedophile priests, pastors and other religious leaders of faith sexually assaulted Kansas children,” Holland said.

His proposed amendment to the Kansas Constitution would make ordained ministers of religion mandatory reporters along with educators, law enforcement officers and others. His amendment contained no exclusion for communications with individuals during a religious confession of sinfulness.

Holland’s proposal in Senate Concurrent Resolution 1624 was introduced in March, but the Senate Judiciary Committee had taken no action on the measure.

If his motion had drawn support from 24 of the 40 senators, the underlying amendment would have become available for consideration by the full Senate. To make it to statewide ballots, two-thirds of Senate members and two-thirds of House members would have had to vote for it.

In the House, Rep. Jim Gartner, D-Topeka, was author of a comparable unsuccessful motion that would have brought to the House floor a bill repealing the state’s 6.5% sales tax on groceries. Kansas has the nation’s second-highest food sales tax in the nation, and pressure has been building to devote a portion of the state’s tax revenue surplus to reducing or eliminating the food sales tax on groceries.

Gartner invoked a rule triggering the vote on his motion to withdraw House Bill 2487 from the House Taxation Committee. He needed 70 votes to pull it off. The motion was rejected 48-74, with 10 Republicans joining all 38 Democrats in support of Gartner’s idea of breathing life into the bill.

“The majority party struck down direct, immediate tax relief to families,” said House Minority Leader Tom Sawyer, a Wichita Democrat. “We will work with them to keep pressing for a 0% state food tax. We can afford it, Kansans need it, and it’s our job. We’re not finished trying to axe the food tax yet.”

Rep. Dave Baker, a Council Grove Republican who voted for the motion, said the higher food sales tax in Kansas was incentive for shoppers to go to grocery stores in Missouri, where the food sales tax is 1.2%.

“I’m telling you they’re getting crushed in Kansas City,” he said. “It has turned into a weekend adventure for all those people to go over there and shop in Missouri.”

GOP leaders in the Legislature have weighed the possibility of phasing out state portion of food sales tax over three years, but have been cool to giving Kelly a policy victory amid her campaign for re-election.

During a House Republican caucus prior to voting on Gartner’s motion, House Speaker Ron Ryckman of Olathe said this procedural move was an attempt to divide the party.

Rep. Brenda Landwehr, R-Wichita, warned colleagues not to burn through excess cash on hand because when the money evaporated the requests for more spending would remain.

“You’re not gonna want to cut these budgets. What do you think your schools are gonna say?” Landwher said. “I have never and I will not under any circumstances vote for a tax increase because you act irresponsibly.”

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/2022/04/26/kansas-democrats-invoke-special-rules-to-force-votes-on-food-sales-tax-child-abuse-bills/.

A push to dump the Kansas food sales tax could run into election politics

Efforts to eliminate the 6.5% sales tax on food have the support of the leading candidates for governor, but the change has hit some political hurdles nonetheless.

by Dylan Lysen, KCUR and Kansas News Service

Lawrence, Kansas — Buying groceries has become more difficult for Patty Wiggins.

Previously, a week’s worth of groceries cost the retired nurse about $30. But as inflation over the last year made seemingly everything more expensive, the groceries cost about $50.

To help fill that gap, Wiggins, who lives in Lawrence, supplements her groceries through her local food bank, Just Food. Wiggins said she wished she wouldn’t need to do that, and there is some hope that some relief is on the way.

Kansas lawmakers are debating a bill that would eliminate state sales tax on food. If the bill becomes law, it would wipe out the state’s 6.5% sales tax on food and provide a little more spending room for shoppers like Wiggins.

“(Spending) $10 or $20 more a month may not sound like a lot,” Wiggins said. “But it makes a difference, especially when you live like me on a fixed income.”

Despite apparent bipartisan support for dumping the sales tax on food — it’s a top priority of Democratic Gov. Laura Kelly and the change has support from Attorney General Derek Schmidt, her likely re-election opponent in November — the effort looks shaky at best.

Already, one state Senate committee has amended the proposal to delay the end of the tax by a year, to Jan. 1, 2024.

The Republican-controlled Legislature has also tried to tie the measure to other, more partisan tax changes. And GOP lawmakers could be reluctant to give Kelly a win on cutting taxes in an election year.

Can the state afford it?

Republican state Sen. Caryn Tyson from southeast Kansas chairs the tax committee and said the elimination of the sales tax on food has been complicated by another major tax bill. The governor lobbied hard for a change in law that will let the state give roughly $1 billion in potential tax incentives to a company — its identity hasn’t been made public — if it delivers on promises for a manufacturing plant with thousands of jobs.

Tyson said if the company chooses to move to Kansas, the state would be providing millions of dollars in incentives to the company for years. Erasing the sales tax on food could cost the state from $320 million to $785 million a year in revenue. Tyson said the tax giveaways to a new, large employer would make it harder to afford the lost money to the state that would come with exempting food from the sales tax.

“We have to be good stewards of the state’s money,” Tyson said. “That has to be taken into consideration when working on other kinds of legislation.”

Along with pushing back the start date of the food sales tax cut, the amended bill also includes making changes to the state’s sales tax on utilities.

Sen. Tom Holland, the top-ranking Democrat on the tax committee, wants the food sales tax to go away in July — not a year and a half later.

Holland also said Kansas can afford to offer the incentives to a manufacturer and cut the sales tax because the state expects to have more than $2 billion in surplus at the end of the fiscal year in June.

“We need to get that tax relief back to Kansas families,” he said. “The best way we can do that is a sales tax refund bill.”

Inflation pressure

Advocates for the cut have said it is needed now to give Kansans a break when food prices are skyrocketing.

The U.S. Department of Labor says the country saw a 7.5% increase in rate of inflation over the last year, which is the largest increase since 1982.

Wiggins, the retired nurse, said she saw a small increase to her Social Security checks. But she said that didn’t make much of a difference.

“It’s all gone because of the inflation,” Wiggins said. “They say inflation has hit certain portions of the groceries. But what I see in the stores, it has hit everything.”

She is not alone. Brain Walker, president for the Kansas Food Bank based in Wichita, said many of the more than 200,000 Kansans his organization serves would benefit from food sales tax relief. Removing the tax would immediately allow them to put more food on their tables, he said.

People with lower incomes are disproportionately affected by the tax, Walker said. He used the example of a four-person family making $20,000 a year purchasing the same amount of food as a four-person family making $100,000 a year. While the families buy the same amount of food and pay the same amount of tax on it, the family with a smaller household income pays a larger percentage of that income toward the tax.

“To us, it makes really good sense,” Walker said. “When you cut the sales tax, you aren’t favoring anybody — both groups of folks get the relief. But the help it extends to a struggling family is huge.”

Election politics

Debates about giving breaks to consumers and whether the state can afford the lost revenue — Republicans note that the state’s financial surplus is propped up by federal pandemic aid that won’t continue in years to come — come in the midst of an election year.

Kelly, who is running for a second term, has repeatedly called for the cut of the tax. It featured prominently in her State of the State address in January and her “Axe the Food Tax” slogan plays in her re-election campaign. Kelly says it would save the average Kansas family about $500 a year.

But Schmidt also asked lawmakers to make a cut this year.

In a letter to Republican legislative leaders in November, Schmidt called for the lawmakers to eliminate or at least significantly reduce the tax on groceries because of inflation.

Wiggins said she hopes lawmakers don’t delay on approving legislation.

“It would be nice to think they would pass it and get started changing (the tax),” she said. “I’ll believe it when I see it.”

Dylan Lysen reports on politics for the Kansas News Service. You can follow him on Twitter @DylanLysen or email him at dlysen (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/2022-02-22/a-push-to-dump-the-kansas-food-sales-tax-could-run-into-election-politics.

Kansas bills eliminating food sales tax offer different approaches to addressing food insecurity

by Noah Taborda, Kansas Reflector

Topeka — A pair of bills aimed at eliminating the food sales tax on food and groceries in Kansas will help reduce rising food insecurity and aid families in getting food on the table, supporters say.

House Bill 2484 would exempt food and food ingredients, including products sold at restaurants, from state retail sales and compensation use tax beginning Jan. 1, 2023. The bill would not include alcoholic beverages or tobacco.

The second measure under consideration Tuesday, House Bill 2487, would exempt Kansans beginning July 1. The measure excludes prepared food from the exemption, unlike the first bill, and provides an exemption for sales of farm products sold at farmers’ markets.

Haley Kottler, thriving campaign director for Kansas Appleseed, said COVID-19 has exacerbated many food insecurity issues Kansas families already faced. She said the average family in need would notice savings of about $500 a year through either measure.

“If we want to see Kansas thrive, we need to address the rise in food insecurity any way that we can,” Kottler told legislators on the House Taxation Committee, led by Rep. Adam Smith, R-Weskan. “A 0% sales tax rate food and food ingredient policy solution will directly help all Kansans experiencing hunger and those who are not, while benefiting the Kansas economy.”

The renewed initiative to cut the food sales tax comes amid a budget surplus and after Gov, Laura Kelly and Attorney General Derek Schmidt each proposed either elimination or reduction of the tax. The governor has indicated she would sign the measure once it reaches her desk, if it is a clean bill without other tax breaks.

In 2019, the governor vetoed a pair of bills that would have gradually lowered sales tax down because they tied the measure to income tax breaks Kelly regarded as fiscally irresponsible.

The first proposal, House Bill 2484, would reduce state revenues by $319.8 million in 2023, $782.0 million in 2024 and $796.9 million in FY 2025, according to estimates from the Department of Revenue. The department estimated House Bill 2487 to carry a higher fiscal impact in the first year before leveling off, with $442.9 million in reduced revenue for 2023, $492.2 million in 2024 and $501.6 million in 2025.

Both plans would repeal the state’s non-refundable food tax credit available to certain Kansas residents with a qualifying income of less than $30,615. Revenue estimates suggest repealing the credit would save $10.3 million each year.

John Jenks, public policy director for The Greater Kansas City Chamber of Commerce, said Kansans are feeling the weight of one of the highest sales tax rates in the country and deserve relief.

“The Kansans that feel the greatest impact on this type of tax are often lower-income and underserved, as sales taxes, and especially a tax on food and groceries, is a regressive tax that disproportionately affects lower-income citizens,” Jenks said. “By reducing and eventually eliminating the state sales tax on food and groceries, the state of Kansas can help put money back in the pockets of Kansans to spend on other things and services throughout the state.”

While the KC Chamber approved of the goal, it urged a phased-in approach to be mindful of how quickly the state’s budget surplus can disappear and to allow all stakeholders time to adapt.

One notable difference between the two measures is the effect on local sales tax. While House Bill 2484 would not change local finances, the inclusion of a farmers market sales tax exemption in House Bill 2487 would decrease local sales tax revenue.

Still, the Kansas Association of Counties indicated that eliminating the state sales tax on food could increase local sales tax revenues used in part to finance local governments, especially in border counties and communities where many will cross state lines for cheaper groceries. Jay Hall, deputy director for the association, spoke in support of 2484 because it leaves the local portion of the sales tax untouched.

“We ask that the committee not also reduce the local portion of the tax because counties depend on that revenue,” Hall said. “If we were to reduce those sales taxes for the local portion, which would essentially shift that tax burden to the property tax.”

Another difference between these two measures is the inclusion of prepared food as sales tax exempt present in House Bill 2484. It defines prepared food as food sold heated, a product with two or more food ingredients combined by the seller for sale as a single item, or food sold with utensils provided by the seller.

Scott Schneider, representing the Kansas restaurant and hospitality Association, opposed House Bill 2487 but backed 2484 because it treats all food the same whether it is prepared or unprepared.

“I would encourage you to think about the small towns who no longer have a grocery store,” Schneider said. “People get their food where they can. Should those who have less access to unprepared foods pay more for their breakfast?”

He noted that one-half of every food sale was through a restaurant before the pandemic.

An area of concern for those who testified in opposition or offered a neutral viewpoint was the expected loss of revenue contributing to the state’s highway fund. House Bill 2487 would adjust the distribution of retail sales tax to ensure additional dollars for the highway fund, but the transportation piggybank would still realize revenue losses.

The Kansas Department of Transportation testified against the measures and warned about ramifications if the fund is not whole. Travis Lowe, a lobbyist for Economic Lifelines, a grassroots transportation organization, recommended an amendment to take care of the highway fund.

“The Eisenhower Legacy Transportation Program and its commitment to the state was approved under the assumption of this sustained funding source,” Lowe said. “If there is not an adjustment, the State Highway Fund will experience a large shortfall, undoing all the recent progress made by the Legislature in recent years to suspend the transfers from the State Highway Fund,”

The Kansas Farm Bureau also opposed the bill because food is one of the final sale destinations for agricultural products.

“A retail sales tax system should be designed to tax the ultimate retail sale,” said John Donley, representing the bureau. “It is our fear that the reduction in the retail sales tax of food may be a first step in moving toward a value-added taxing (VAT) system, which we strongly oppose.”

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/2022/01/26/kansas-bills-eliminating-food-sales-tax-offer-different-approaches-to-addressing-food-insecurity/