Kansas taxpayers will see a series of tax cuts and increases after the Senate and House voted to override Kansas Gov. Laura Kelly’s veto of a $94 million package.
The measure cuts state revenue by about $130 million annually. It increases the standard deduction, allowing taxpayers to itemize state returns regardless of whether they did so on federal tax returns, and lets multinational corporations bring overseas profits back to Kansas without paying income tax.
Senate lawmakers approved the override 30-10. The House approved the override with a vote of 84-39 vote.
The bill would permit multinational companies to bring money from overseas back to Kansas without paying state taxes. It would also increase the state’s standard deduction and allow Kansans to itemize state tax returns regardless of whether they itemize their federal taxes. It offsets some of those costs by imposing state sales taxes on goods sold online to Kansans.
With increased revenue estimates and a projected budget surplus over $1 billion, Republican lawmakers said it was past time to implement tax cuts they’d been seeking for three years.
In 2018 and 2019, Kelly vetoed a bill to implement those policies. In February, she proposed that the Legislature replace those cuts with an overall increase of the standard deduction and by applying Kansas sales tax to out-of-state retailers who sell products online in Kansas.
Kelly said her proposal would give relief to more Kansans without impacting the state’s budget.
The Legislature instead added both of Kelly’s suggestions to the bill without removing any existing tax cuts. The new tax on online sales offsets about $35 million in costs.