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Bill Would Reinstate Kansas Business Taxes, Cut Food Sales Tax

Stephen Koranda

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.

“A business does not hire people just because new money comes into their ownership, they hire because of need. They can’t keep up with the business demands, they don’t have capacity, they’re maxed out,” Johnson says.

Johnson wants the business tax exemption reversed because she says it has helped create state budget troubles. But Secretary of Revenue Nick Jordan points out that the bill as written would also cut state revenues by lowering the food sales tax.

“The problem from a fiscal standpoint is that outweighs what you’re going to get back on the business income tax so you go in the hole. This really doesn’t help the budget going through ’17 forward,” Jordan says.

Jordan and other opponents of the bill say reinstating the income taxes would make it harder to attract new businesses to the state and could cost jobs.

Stephen Koranda is the managing editor of the Kansas News Service, based at KCUR. He has nearly 20 years of experience in public media as a reporter and editor.