Reducing the state rate for sales and use taxes for sales of food and food ingredients and modifying the percent credited to the state highway fund from revenue collected.
Impact
In addition to lowering taxes on food, the bill also makes adjustments to the amount of sales tax revenue redirected to the state highway fund. Until the new rates take effect, a sizeable percentage of the existing tax revenue collected will continue to support state highway initiatives. The bill is designed to balance tax reductions while ensuring that transportation infrastructure can still be funded adequately through the reallocation of remaining revenues generated from other taxed goods and services until the complete phase-out of the food tax.
Summary
House Bill 2546 is an act aimed at reducing the sales and compensating use tax rates specifically for the sale of food and food ingredients in Kansas. The bill modifies existing tax structures to phase the tax rate down from the current rate first to 4% starting January 1, 2023, then to 2% by January 1, 2024, and ultimately to 0% by April 1, 2024. This significant reduction is expected to alleviate the financial burden on consumers purchasing essential food items.
Contention
The bill has sparked discussions regarding its long-term implications for state funding, particularly for local infrastructure projects. Proponents argue that the tax reduction will provide immediate relief to families, aiding in food affordability, whereas critics express concern that the transition may reduce necessary funding for road maintenance and development. As tax revenues decrease, there is worry that other areas of state spending might suffer or require adjustments as a consequence of prioritizing consumer tax relief over infrastructure investment.
Decreasing the state rate for sales and use taxes for prepared food and increasing the percent credited to the state highway fund from sales and use tax revenue collected.
Eliminating the income limit to qualify for the subtraction modification exempting social security benefits, increasing the income tax credit amount for household and dependent care expenses, establishing the veterans' valor property tax relief act providing for an income tax credit or refund for eligible individuals, citing the increased property tax homestead refund claim section as the homeowners' property tax freeze program, decreasing the normal privilege tax rate, increasing the extent of property tax exemption for residential property from the statewide school levy, decreasing the rate of ad valorem tax imposed by a school district; providing for certain transfers to the state school district finance fund, reducing the state rate of tax on sales of food and food ingredients and modifying the percent credited to the state highway fund from revenue collected.
Providing for food sales tax revenue replacement for STAR bond districts established prior to December 31, 2022, establishing the STAR bonds food sales tax revenue replacement fund, providing for transfers from the state general fund to such revenue replacement fund and transfers from such revenue replacement fund in the amount of food sales tax revenues lost to the applicable cities or counties and extending the sunset date of the STAR bonds financing act to July 1, 2031.
To Create The Grocery Tax Relief Act; To Amend The Law Concerning The Sales And Use Taxes Levied On Food And Food Ingredients, As Affirmed By Referred Act 19 Of 1958; And To Exempt Groceries From State Sales And Use Taxes.
To Create The Grocery Tax Relief Act; To Amend The Law Concerning The Sales And Use Taxes Levied On Food And Food Ingredients, As Affirmed By Referred Act 19 Of 1958; And To Exempt Groceries From State Sales And Use Taxes.
House Substitute for Substitute for SB 33 by Committee on Taxation - Providing that countywide retailers' sales tax is apportioned based on total assessed valuations of the county and cities within the county rather than property taxes levied.