Economic gurus warn KS of federal tax implications



April 18, 2018 - 11:00 PM

On April 7, the Kansas Senate passed Substitute for House Bill 2228. On its surface, this bill addresses issues from the federal tax plan passed in December. However, it also includes extremely fiscally irresponsible provisions that will cost the state at least $494 million over the next five years — revenue that Kansas cannot afford to forgo at this time.

The bill includes several provisions that are meant to align Kansas’ tax code with the recently passed federal plan, capturing revenue that would otherwise be lost. Many of the assumed “pay fors” are related to conformity with the international provisions of the federal plan — provisions that, according to the Department of Revenue, have great uncertainty:

“Amended and new federal statutes outlined in the [federal tax bill, the Tax Cuts and Jobs Act (TCJA)] regarding repatriation and international income do not clarify how international income and expenses are recognized on the federal return. This creates uncertainty in how Kansas statute conforms to these international provisions. Such uncertainty makes estimation of changes in Kansas tax revenues not possible to quantify.”

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