taxes

Stephen Koranda / Kansas Public Radio/File Photo

Kansas lawmakers will learn this week how the state’s finances are shaping up. As KPR’s Stephen Koranda reports, new revenue numbers will be unveiled Wednesday.

The revenue numbers project how much Kansas will collect in taxes, and that information tells lawmakers how much they have to spend.

The Legislature actually already approved a state budget, but it was more of a preliminary plan. They suspected they would need to do more work, and the new revenue numbers will tell them how hard that work will be.

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Kansas Governor Sam Brownback says the economic border war in the Kansas City area has gone on long enough. He's proposing to cut back on economic incentives for businesses that jump the state line simply to get tax breaks. Brownback hopes both states will agree to the new restrictions in the greater Kansas City area.

“That’s really what I hope this does. It’s a good solid move forward that can be accepted on both sides while you continue to work on the issues,”Brownback says.

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The majority of business owners surveyed by the Wichita Independent Business Association say the state’s income tax exemption for many small businesses should be amended.

Back in 2012, Gov. Sam Brownback ended all taxes on non-wage income for LLCs, subchapter S corporations and sole proprietorships, calling the move a “shot of adrenaline” for the economy. The idea was that small businesses would keep more of the money they make, allowing them to hire more people and expand their facilities.

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Tax collections in Kansas were less than $2 million short of estimates last month.

The state Department of Revenue on Friday said total tax receipts were $1.7 million below projections. The numbers are a turnaround from February, however, when collections were almost $54 million short, eating up the state's meager $6 million savings account.

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A bill in a House committee would reinstate Kansas business taxes that were eliminated several years ago and then cut the sales tax rate on groceries.

Several business owners asked the Tax Committee to reinstate the income taxes they used to pay. Peggy Johnson retired from her financial advisor job just a few months ago. She says she saved money with the business tax cut, but didn’t create any new jobs.

Stephen Koranda, File Photo / Kansas Public Radio

Three Republican Kansas senators say the state should overhaul a policy that lets thousands of business owners avoid paying income taxes. Under current law, owners of more than 300,000 businesses don’t have to pay any state income taxes.

Senate Vice President Jeff King says that was not their intention when lawmakers passed the tax cut. He says they only meant to exempt working capital from income taxes, not the wages a business owner takes home.

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A bill under consideration in the Kansas Statehouse would speed up implementation of a law making it more difficult for city and county governments to raise local taxes.

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Kansas tax collections came in nearly $7 million below estimates last month, despite some bright spots in the January report.

Kansas individual income tax collections came in $8 million higher than expected, but corporate income tax collections were well below the estimate and sales tax receipts also came up short. Revenue Secretary Nick Jordan says weak oil, aviation and agriculture industries are hurting tax collections.

A tax amnesty program for delinquent taxpayers brought in less money than lawmakers anticipated.

The program allowed people and businesses to pay back taxes without a penalty. Lawmakers estimated it would generate $30 million, but the program brought in $23 million.

While the total was $7 million less than expected, Kansas Revenue Secretary Nick Jordan is still happy with the results.

“I think it’s a good number. It’s obviously collection of taxes due, rightfully so they’ve been paid. Most of it was in corporate income. We’re pleased with the number,” Jordan says.

Ervins Strauhmanis, flickr Creative Commons

Kansas collected $27 million less than expected in taxes last month, largely driven by sagging income and sales tax receipts. The drop is enough to erase the state’s small estimated savings account.

Kansas Secretary of Revenue Nick Jordan says it’s too early to tell if it’s a one-time drop in income taxes or a trend.

“It is the first time this fiscal year that individual income tax receipts have not grown compared to the prior fiscal year to date,” Jordan says.

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