IMMEDIATE RELEASE
April 19, 2007

Contact:

Sherriene Jones-Sontag
785/296-2302

TAX RELIEF BECOMES OFFICIAL

Topeka – Kansas House Republicans have fulfilled their pledge made earlier this year to provide tax relief to Kansas businesses and families.  Governor Kathleen Sebelius signed House Bills 2264, 2031 and 2476 into law today.

“I am pleased we were able to keep our pledge to the people of Kansas to provide tax relief for them. This is responsible tax cutting,” Speaker Melvin Neufeld (R-Ingalls) said. “Thanks to our state’s improving economy, we have seen a windfall of more than $140 million in state revenues this fiscal year.   As responsible legislators we used this opportunity to establish new tax policy to keep our state’s economy growing.  We will stimulate much more in job and revenue growth in Kansas by returning unexpected revenue back into our economy than if we increase state spending.”

• HB 2264 repeals the state franchise tax. The five year phase-out raises the threshold rate when businesses must begin paying taxes on their assets from $100,000 to $1 million.  Then the franchise tax is cut 25% a year until it evaporates.   It totals about $135 million in tax cuts in the next five years for Kansas businesses.

• HB 2031 exempts Social Security Benefits from state income tax for retired and disabled Kansans who making less than $50,000 and $75,000 in 2008.  It’s a tax relief total of nearly $58 million dollars for retired and disabled Kansans in the next five years.

• HB 2031 also increases the Kansas Earned Income Tax Credit from 15% to 17% of the federal earned income tax credit that the state matches. It will give Kansans with low incomes nearly $46 million in tax relief during the next five years.
• HB 2476 increases the maximum credit to $700 in the Homestead Property Tax Refund for homeowners and renters whose total annual household income is less than $28,000.  Also now excludes 50% of Social Security benefits and all disability payments in determining eligibility.  It is worth about $58 million in tax relief in the next five years.

“I am delighted the governor accepted the Legislative Tax Package in its entirety,” House Taxation Committee Chairman Kenny Wilk (R-Lansing) said.  “These tax cuts will lessen the burden for Kansas  Seniors and the Disabled who rely on Social Security; for businesses of all sizes who want to expand in our state; and for those on limited incomes.  The cuts also will help our economy continue to grow.  I want to thank my committee for their hard work in getting this legislation passed this session.”

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House Members also fought to reduce the state’s unemployment insurance rates for businesses in good standing.  Senate Bill 83 will save employers more than $175 million during the next two years.

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What Kansans are saying about House members’ fight to provide tax relief to Kansas businesses and families:

Ernest Kutzley Advocacy Director, AARP of Kansas. “On behalf of the 362,000 AARP members in Kansas and all older Kansans who have difficulty paying increasing property taxes on fixed incomes, we applaud the Legislature's efforts to provide targeted property tax relief."

David Cross, Lewis cattleman and President, Kansas Livestock Association. “Our members have been frustrated with the franchise tax for years.  The franchise tax is assessed on all types of business entities based on equity.  KLA members and others in agriculture use various business structures, like corporations and limited liability companies, to facilitate the transfer of farming and ranching operations from one generation to another. The franchise tax is a burden on farming and ranching operations trying to build equity to maintain a financially strong business.  I appreciate the Legislature’s willingness to address several issues important to agriculture, including the elimination of the franchise tax.”

Ken Daniels, owner of Midway Wholesale, Topeka.  “The House championed the idea of completely ridding ourselves of the Kansas Franchise Tax, the worst business tax we have.  100% of that tax reduction will go to companies who have invested in Kansas employees and facilities. Pretty smart -- reducing taxes in such a way that all the money stays in Kansas!”

Jay Allbaugh, Chairman, Kansas Chamber of Commerce & Industry. "Successful legislation to phase out the Kansas corporate franchise tax will help stimulate the economy, encourage capital investments, and job growth.  The work done by House Members has been essential this session in creating a positive environment for Kansas employers to become more productive and to create new jobs for Kansans.  On behalf of small, medium and large businesses all across the state, I would like to thank House Speaker Melvin Neufeld and legislative leadership for the progress made to move our state towards a much better business climate.” 

Alan Cobb, Kansas State Director, Americans for Prosperity. “What a difference just a few years makes.  It was just in 2004 that the House passed a $1B tax increase.  Now they are cutting and eliminating taxes.  Thanks goes to the House members and House leadership for clearing a pathway to economic growth.”

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