KABR has been contacted by a number of retailers who are interested in seeing changes to the rules for wine tastings.  Several stores have asked for the ability to charge for hosting educational tasting events, others would like to be able to charge for wine clubs.  

If you are interested in exploring possible changes to current rules for conducting wine tastings, please RSVP below to participate in a meeting at 2:00 p.m. Wednesday, June 7, with Debbi Beavers, Director of the Division of Alcoholic Beverage Control and members of the industry.  

This meeting is open to retailers and industry members, please RSVP here.

Directions for participation are posted at the link above.

Contact Amy Campbell if you have questions.

The House will not debate the latest version of Sub for SB 30 today, and many say it won't be debated at all.

We heard this morning that there were problems with the bill and ultimately, the plan to debate taxes today was set aside.  The House went ahead with its debate on K-12 Education, with rumors of 90 amendments in the wings.  Legislative staff have suggested that today's education debate could set a record for amendments drafted.

At this point, we do not know if it was the liquor enforcement tax that derailed the Tax conference committee report - but hopefully our arguments were persuasive enough to keep enforcement tax increases out of the next tax proposal.

Rumors have been swirling that House leadership may have told legislators that the liquor industry was in favor of increasing the enforcement tax up to 10%.  It is difficult to imagine this.  Some legislators said they were told it would only affect customers purchasing drinks, i.e. the drink tax.  Also inaccurate. 

Perhaps the details of liquor taxes have been forgotten since the hearings were held in February, but that is the risk of throwing new items into conference committees that have not passed either chamber.  

Liquor taxes may or may not be a part of future packages - we will just have to see.  Regardless, we hope that retailers have made certain that their legislators know where they stand - especially those who must compete with Missouri retailers.  

The increased income taxes that have been a part of virtually every tax proposal this session will already add to the costs of our small businesses - a targeted tax on the products we sell would be piling on.

Just to be certain, a joint industry letter was circulated to legislators.  Read the contents of that letter below:

Please Oppose CC Report on SB 30

The Tax Conference Committee Report on SB 30, adopted last night includes a 25% increase in the liquor enforcement tax – from 8 to 10 percent.     We would urge you to vote NO !!

1.         After extensive hearings, there was no support in House Tax Committee for an increase in liquor taxes.

2.         Its inclusion clearly violates Joint Rule 3(f) prohibiting a CC report from including subject matters that have not passed either house.    

3.         This 25% increase in the enforcement tax would most heavily impact retail liquor stores and particularly those near our borders – stores already heavily impacted by the recent enactment of SB 13.

Please vote NO!!!!!

Amy Campbell -   Kansas Assn of Beverage Retailers

Scott Schneider/Jason Watkins -   Kansas Beer Wholesalers Assn,   Kansas Restaurant & Hospitality Assn

Whitney Damron -   Kansas Assn for Responsible Liquor Laws

Brad Smoot -   Distilled Spirits Council 

Aaron Mays -   Standard Beverage

Philip Bradley -   Kansas License Beverage Assn,   Kansas Craft Brewers Guild,   Kansas Viticulture and Farm Winery Assn,   Artisan Distillers of Kansas

Larrie Ann Brown -   Wine Institute

John Bottenberg -   MillerCoors

Jim Dorsey -   Southern Glazer’s Wine and Spirits

John Peterson -   Anheuser-Busch Companies

**********************************************************
Contact: Amy Campbell  785-969-1617

 TODAY: Please Oppose Conference Committee Report on SB 30

The Tax Conference Committee Report on SB 30, adopted at the 7:30 p.m. meeting last night,, includes a 25% increase in the liquor enforcement tax – from 8 to 10 percent.   This tax increase has not passed either chamber and should not be part of this conference committee report.   The House plans to vote TODAY.

• After extensive hearings, there was no support in House Tax Committee for an increase in liquor taxes.
• Its inclusion clearly violates Joint Rule 3(f) prohibiting a CC report from including subject matters that have not passed either house.    
• This 25% increase in the enforcement tax would most heavily impact retail liquor stores and particularly those near our borders – stores already heavily impacted by the recent enactment of SB 13.
• The new description of Sub for SB 30 is not yet posted, as it was just adopted last night.  It includes increasing enforcement tax rate from 8% to 10%, increased income tax rates, revoking LLC exemptiion, revoking the sales tax exemption on some services.

Please Act Immediately -

Reach out to the members of the House of Representatives.  Emails and phone calls are helpful.  See article below about the tax bill that failed on Monday. 

Link to List of Representatives

Find your State Representative at https://votesmart.org/  - enter your zip code and street address to find your State Representative and State Senator

NOTE: Secretaries for rank and file legislators were not funded past the 90th Day - so, some office answering machines are not being monitored. In those cases, you may need to send an email or call the mobile phone, if yoou have that number.

Taxes Dominate 1st Week of Veto Session

This afternoon, the House Tax Committee hosted an overview of the budget bills as they are currently proposed by the House Appropriations Committee in order to compare how the multiple tax proposals that have been considered measure up against the spending priorities set up to this point.  Those numbers did not include a House Education funding proposal to address the recent Supreme Court decision citing inadequate state funding for K-12 education, but the committee estimated it could cost an additional $170 million in FY 18 and $350 m in FY 19.  It also did not include a proposal to reduce the planned fund transfers from the Department of Transportation – the Governor’s Budget Amendments recommend transferring all of the available funds from KDOT to balance the budget for the next two years.  Once those numbers were rolled in with the work of the House Appropriations Committee, the target seemed to be around $600 million or more.  There was further discussion of income tax rates, motor fuels tax, tobacco taxes, removing sales tax exemptions from various services, and other strategies.

This is the first time we have seen a tax committee meeting in which those targets are set out before the committee.  It was designed to show committee members what they can – and can’t – accomplish with their current income tax bill.  So far, the House Tax Committee has preferred proposals that focus on multiple income tax tiers and rolling back the LLC exemption, like the bill passed in February that was vetoed by Governor Brownback – but do not appear to raise enough revenue to cover everything discussed today.

Rep. Ken Corbet argued that increasing motor fuels tax and tobacco taxes would simply disadvantage current business owners – especially those who compete along the Missouri border – “it is a double smack against all of those who try to have a business on the border.  If we keep this up, it looks like Kansas making Missouri great again and I think we need to think about that.”

Rep. Tom Burroughs agreed, pointing out that simply rolling back all of the pieces of the 2012 tax changes would resolve the budget hole - rather than piecing together a bunch of new tax increases.  “I think this is the wrong route to take.  If this budget crisis was caused by previous legislatures, then we need to go back and right the ship.  If the 2012 tax plan is a failure, let’s go back and look at the 2012 tax numbers and see where that puts us.”  Corbet is not a fan of revoking the 2012 tax plan.

On another floor of the Capitol, the Senate Taxation Committee was compiling another tax proposal, including a form of flat tax with the lowest income Kansans (under $6300 for single filers and $12600 for married) paying 0% and everyone else paying 4.4%.  The plan would eliminate the current exemptions for LLCs and non-wage income January 1, 2018.  Many of the plans rejected to date have tried to make the tax increases retroactive to January 1, 2017.  The plan would also reduce the sales tax on food from 6.5% to 5.5%  This plan was proposed by first term Senator Larry Alley.

So far this week, the Tax conference committee has rolled out two income tax increase proposals with multiple tax tiers, also revoking the LLC and non-wage income exemptions, along with reinstating a number of the income tax deductions that have been eliminated.  Each time, the scheduled floor debate (Tuesday in the Senate and Wednesday in the House) was cancelled for lack of votes. 

At this point, neither chamber has taken the steps that would be needed to consolidate support for a tax proposal either through a coalition of moderate and conservative Republicans or through a coalition of moderate Republicans and Democrats.  One stumbling block is that many want to see an education funding plan passed before agreeing on a revenue package.  There are those who feel the proposals so far have not raised enough money and those who feel they raise too much.  And there are those who will not vote for any increase, believing that not enough has been done to cut state spending.  Neither the Senate nor the House can claim they have the votes organized for any given plan – and meanwhile, the Governor has already vetoed the tax proposal that was adopted in February that looked similar to this week’s bills.

On Tuesday, legislators were told to plan to work through the weekend.  That remains to be seen.  The veto session appears likely to last beyond the two week target.