IMMEDIATE RELEASE
Feb. 14, 2007

Topeka – The Kansas House of Representatives voted 91-30 today to approve House Bill 2031, a bill that will repeal the state’s franchise tax over a three-year period. Repealing the franchise tax is part of the House Republican Caucus’ 2007 Legislative Agenda. 

“I applaud those House Democrats who broke from their party and joined House Republicans in support of this important legislation to help Kansas business owners and farmers,” House Speaker Melvin Neufeld (R-Ingalls) said. “I can’t think of a better way to help our state’s economy than leaving the money in the pockets of business owners and farmers who will then use it to invest in their businesses and hire more workers.”

Currently businesses whose assets are valued at less than $100,000 are exempt from paying franchise taxes.  The three-year repeal increases the assets exemption to $3,000,000 this year, then in 2008 reduces the tax rate from .125% to .0625%, and eliminates it completely in 2009.

“I would have liked to see a unanimous vote in favor of helping Kansas businesses,",” said Majority Leader Ray Merrick (R-Stilwell). “Despite the Democrats’ efforts to steer away from sound policy, House Republicans fulfilled our pledge to provide tax relief for business and to promote capital in Kansas.”

Other tax relief being sought by the 2007 House Republican Legislative Agenda includes restructuring the state’s corporate income tax rates; permanently reducing the state’s Unemployment Insurance rate; exempting social security income for state income tax; and supporting a constitutional amendment to ease the property tax burden on Kansas citizens, especially those reaching the maximum social security retirement age.

House Bill 2031 now moves to the Senate for possible debate and vote.

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