Division of the Budget
Landon State Office Building Phone: (785) 296-2436
900 SW Jackson Street, Room 504 adam.c.proffitt@ks.gov
Topeka, KS 66612 Division of the Budget http://budget.kansas.gov
Adam Proffitt, Director Laura Kelly, Governor


February 22, 2023


The Honorable Caryn Tyson, Chairperson
Senate Committee on Assessment and Taxation
300 SW 10th Avenue, Room 548-S
Topeka, Kansas 66612
Dear Senator Tyson:
SUBJECT: Fiscal Note for SB 227 by Senate Committee on Assessment and Taxation
In accordance with KSA 75-3715a, the following fiscal note concerning SB 227 is
respectfully submitted to your committee.
SB 227 would allow movie theaters to retain the state sales tax collected on the admission
charged for viewing movies or films and on concessions sold at the business. The business would
be required to remit the local portion of the sales tax collected to the Department of Revenue. The
eligible business would be able to retain the state sales tax collected beginning on July 1, 2023,
through June 30, 2025.

Estimated State Fiscal Effect
FY 2023 FY 2023 FY 2024 FY 2024
SGF All Funds SGF All Funds
Revenue -- -- ($3,200,000) ($3,800,000)
Expenditure -- -- $56,643 $56,643
FTE Pos. -- -- -- --
The Department of Revenue estimates that SB 227 would decrease state revenues by $3.8
million in FY 2024. Of that total, the State General Fund is estimated to decrease by $3.2 million
in FY 2024, while the State Highway Fund is estimated to decrease by $600,000 in FY 2024. The
Department indicates that similar results would also occur in FY 2025. Local sales tax revenues
collected from movies or films and concessions sold at the business are not estimated to be affected
under the provisions of this bill.
The Honorable Caryn Tyson, Chairperson
Page 2—SB 227

To formulate these estimates, the Department of Revenue reviewed sales tax data on movie
theater businesses. State sales and use tax collections reported by movie theaters were $3.8 million
in calendar year 2021. Assuming that FY 2024 and FY 2025 movie theater collections will be
similar to calendar year 2021 collections, the bill would reduce state sales and use tax collections
by approximately $3.8 million in each fiscal year.
The Department of Revenue indicates that it would require a total $56,643 from the State
General Fund in FY 2024 to update forms and publications and to modify the sales tax system.
The required programming for this bill by itself would be performed by existing staff of the
Department of Revenue. In addition, if the combined effect of implementing this bill and other
enacted legislation exceeds the Department’s programming resources, or if the time for
implementing the changes is too short, additional expenditures for outside contract programmer
services beyond the Department’s current budget may be required.
The Kansas Department of Transportation (KDOT) indicates that the bill would reduce
state revenues to the State Highway Fund as noted above. KDOT indicates that when the state
receives fewer State Highway Fund dollars it may be required to make corresponding reductions
to planned expenditures for projects funded under the comprehensive transportation plan. Any
fiscal effect associated with SB 227 is not reflected in The FY 2024 Governor’s Budget Report.
The Kansas Association of Counties and the League of Kansas Municipalities indicate that
the bill would have no fiscal effect on local sales tax collections.


Sincerely,

Adam Proffitt
Director of the Budget

cc: Lynn Robinson, Department of Revenue
Brendan Yorkey, Department of Transportation
Wendi Stark, League of Kansas Municipalities
Jay Hall, Kansas Association of Counties