Back to school sales tax

A pair of Kansas Senators hoped Tuesday to provide financial relief for families spending money on back-to-school supplies.

Senate Bill 432 would create a sales tax holiday in early August during which certain school supplies, personal computers and clothing would be tax-exempt. This four-day holiday would occur on the first Thursday in August until midnight the following Sunday.

As a legislator representing a border district, Sen. John Doll, R-Garden City, said many of his constituents cross over to Oklahoma during their sales tax holiday, which takes place at the same time. He said now that the state has a budget surplus, it’s the optimal time to put Kansas on a level playing field.

Any way that we can get customers to come into our stores, any way that we can help as a government, that’s what government to me is for,” Doll said. “I think this bill will even help our struggling businesses by bringing people in to shop because of this holiday.”

Doll teamed up with Sen. Virgil Peck, R-Havana, to make the case for this bill before the Senate Assessment and Taxation Committee. They argued that border states like Missouri and Oklahoma have a leg up, and this measure would catapult Kansas above them with more tax-exempt items and a longer holiday.

Missouri and Oklahoma only have three scheduled back-to-school tax exemption days. The Kansas Legislature considered similar bills in the past, but none have passed.

According to Kansas Department of Revenue estimates, the holiday would cost the state $8,350,000 in revenue in 2023, $8,500,000 in 2024 and $9,000,000 in 2027. However, Peck asserted these estimates were overblown. Sen. Caryn Tyson, R-Parker, said fiscal notes attached to previous iterations of the bill were exaggerated as well.

I would ask you not to look at this legislation as what money Kansas loses in sales tax revenue, but what Kansas will gain by incentivizing our citizens and even some of our neighboring states to make purchases in Kansas for back-to-school supplies,” Peck said.

By the Havana Republican’s estimation, 17 other states have enacted some varying form of tax-exempt period for back-to-school supplies. He also believed the impact would be minimal on individual business, as the plan was to allow local control over any municipal sales tax exemptions.

Peck was unable to provide inquiring legislators, such as Sen. Tom Holland, D-Baldwin City, with concrete figures on what benefits states with tax holidays have experienced. Some legislators also questioned if the measure would be compliant with the Streamlined Sales and Use Tax Agreement

Both testifying senators expressed a willingness to amend the bill if it aided passage.

Sen. Molly Baumgardner, a Louisburg Republican and member of the Senate tax panel, voiced support for the measure to relieve stress during one of the most challenging times of the year for Kansas families.

They’ve got the list of supplies they need, the enrollment fee, the textbook fees even for kindergarteners, and then new clothes, new shoes, all of those things need to be ready,” Baumgardner said. “This is a wonderful thing. It’s long overdue and it will make a difference for families.”

 

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