Bill Summary – FastDemocracy

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


                                                         March 6, 2023


          The Honorable Adam Smith, Chairperson
          House Committee on Taxation
          300 SW 10th Avenue, Room 346-S
          Topeka, Kansas 66612
          Dear Representative Smith:
                    SUBJECT:         Fiscal Note for HB 2411 by House Committee on Taxation
                  In accordance with KSA 75-3715a, the following fiscal note concerning HB 2411 is
          respectfully submitted to your committee.
                  Under current law, the penalty for the failure of an employer to remit any amount of
          withholding taxes is 15.0 percent of the amount of underpayment. HB 2411 would set the penalty
          as a percentage of the amount of the underpayment as follows:
                    1.        2.0 percent if remitted within one to five days;
                    2.        5.0 percent if remitted within six to 15 days;
                    3.        10.0 percent if remitted after 15 days; and
                    4.        15.0 percent if remitted after 15 days and the Department has issued a notice to the
                              person regarding the underpayment, but the amount of the underpayment was not
                              remitted within ten days of issuance of the notice.
                  The Department of Revenue estimates that HB 2411 has the potential to increase State
          General Fund revenues by negligible amounts beginning in FY 2024. The current 15.0 penalty
          has resulted in a very small number of employers not paying withholding taxes on or before the
          due date. If the 2.0 percent penalty on late payments within one to five days of the due date leads
          to a slight increase in late payments, then penalty receipts could slightly increase by unknown
          amounts. According to the Department, updating the withholding tax guide would cost $600 from
The Honorable Adam Smith, Chairperson
Page 2—HB 2411

the State General Fund in FY 2024. Any fiscal effect associated with HB 2411 is not reflected in
The FY 2024 Governor’s Budget Report.


                                                   Sincerely,

                                                   Adam Proffitt
                                                   Director of the Budget

cc: Lynn Robinson, Department of Revenue
Statutes affected: 
As introduced: 79-32