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 C. Proffitt, Director Laura Kelly, Governor

February 14, 2024


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 403 by Senate Committee on Assessment and Taxation
In accordance with KSA 75-3715a, the following fiscal note concerning SB 403 is
respectfully submitted to your committee.
SB 403 would provide a sales tax exemption for Be Able, Inc. for the purpose of aiding
vulnerable individuals and those dealing with adversity by creating coaching connections,
cultivating practical skills, and opening doors of opportunity to break the cycle of poverty and
build stability. The organization provides access to vital social and mental health services,
housing, employment, transportation, food and clothing, the operation of a community and adult
day center for those experiencing homelessness or seeking comfort, support, or assistance, and
providing transitional housing. The sales tax exemption would also be extended to any contractor
hired for constructing, maintaining, repairing, enlarging, furnishing, or remodeling any facilities
for Be Able, Inc. The bill includes reporting requirements for contractors and penalties for the use
of the sales tax exemption that is determined to not be part of this project, which would be
punishable as a misdemeanor. The sales tax exemption would go into effect on July 1, 2024, but
for purchases made on or after January 1, 2023, and prior to the effective date of the bill, the
organization would be eligible to submit a sales tax refund request.
Estimated State Fiscal Effect
FY 2024 FY 2025 FY 2026
Expenditures
State General Fund -- -- --
Fee Fund(s) -- $1,800 --
Federal Fund -- -- --
Total Expenditures -- --
Revenues
State General Fund -- ($5,500) ($1,600)
Fee Fund(s) -- (1,200) (350)
Federal Fund -- -- --
Total Revenues -- ($6,700) ($1,950)
FTE Positions -- -- --
The Honorable Caryn Tyson, Chairperson
Page 2—SB 403

The Department of Revenue estimates that SB 403 would decrease state revenues by
$6,700 in FY 2025. Of that total, the State General Fund is estimated to decrease by $5,500 in FY
2025, while the State Highway Fund is estimated to decrease by $1,200 in FY 2025. This bill is
also estimated to decrease local sales tax revenues; however, the specific estimate of lower local
sales tax revenues was not calculated by the Department of Revenue. The fiscal effect to state
revenues during subsequent years would be as follows:
FY 2026 FY 2027 FY 2028 FY 2029
State General Fund ($1,600) ($1,600) ($1,600) ($1,600)
State Highway Fund (350) (350) (350) (350)
($1,950) ($1,950) ($1,950) ($1,950)
To formulate these estimates, the Department of Revenue reviewed data from Be Able,
Inc., which reported a 2023 capital improvement project with an estimated state sales tax
expenditure of $4,750, including $3,900 from the State General Fund and $850 from the State
Highway Fund, which would be eligible for a refund request. Based on information received by
the organization, the bill is estimated to result in annual state sales tax reduction of $1,950,
including $1,600 from the State General Fund and $350 from the State Highway Fund. For FY
2025, the bill is estimated to reduce state sales tax revenue by $6,700 by refunding the
organization’s previously paid sales taxes after January 1, 2023, and for normal expenditures in
FY 2025. According to the Department of Revenue, reissuing sales tax publications and revising
forms would cost $1,800 from the State General Fund in FY 2025.
The Kansas Department of Transportation (KDOT) indicates that the bill would reduce
state revenues to the State Highway Fund as noted above. Any fiscal effect associated with SB
403 is not reflected in The FY 2025 Governor’s Budget Report.
The Kansas Association of Counties and the League of Kansas Municipalities indicate the
bill would provide a net reduction to local sales tax collections that are used in part to finance local
governments. This bill has the potential to reduce revenues that are pledged to repay STAR bond
projects; however, it is unknown what impact the bill would have on the viability of those projects.

Sincerely,

Adam C. Proffitt
Director of the Budget

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

Statutes affected:
As introduced: 79-3606