Division of the Budget
Landon State Office Building Phone: (785) 296-2436
900 SW Jackson Street, Room 504 larry.campbell@ks.gov
Topeka, KS 66612 Division of the Budget http://budget.kansas.gov
Larry L. Campbell, Director Laura Kelly, Governor


February 12, 2019


The Honorable Steven Johnson, Chairperson
House Committee on Taxation
Statehouse, Room 185-N
Topeka, Kansas 66612
Dear Representative Johnson:
SUBJECT: Fiscal Note for HB 2134 by House Committee on Taxation
In accordance with KSA 75-3715a, the following fiscal note concerning HB 2134 is
respectfully submitted to your committee.
HB 2134 would provide a sales tax exemption for nonprofit integrated community care
organizations. In order to receive the sales tax exemption, the nonprofit integrated community
care organization would be required to be exempt from federal income taxes, certified to
participate in the Medicare Program as a hospice, and approved by the Kansas Department of
Aging and Disability Services.

Estimated State Fiscal Effect
FY 2019 FY 2019 FY 2020 FY 2020
SGF All Funds SGF All Funds
Revenue -- -- ($215,500) ($257,000)
Expenditure -- -- $1,200 $1,200
FTE Pos. -- -- -- --
The Department of Revenue estimates that HB 2134 would decrease state revenues by
$257,000 in FY 2020. Of that total, the State General Fund is estimated to decrease by $215,500
in FY 2020, while the State Highway Fund is estimated to decrease by $41,500 in FY 2020. This
bill also is 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 Department of
Revenue indicates that this provision would have a similar fiscal effect in future fiscal years.
The Honorable Steven Johnson, Chairperson
Page 2—HB 2134

The Department indicates that there is one known organization that would meet the
definition of a nonprofit integrated community care organizations and would qualify for this sales
tax exemption. According to the Department of Revenue, reissuing sales tax publications and
issuing the tax entity exemption certificate would cost $1,200 from the State General Fund in FY
2020.
The Kansas Department of Transportation (KDOT) indicates that the bill would reduce
state revenues to the State Highway Fund, as noted above. The Kansas Association of Counties
and the League of Kansas Municipalities indicate that the bill would provide a net reduction to
local sales tax collections that are used in part to finance local governments. Any fiscal effect
associated with HB 2134 is not reflected in The FY 2020 Governor’s Budget Report.


Sincerely,

Larry L. Campbell
Director of the Budget


cc: Lynn Robinson, Department of Revenue
Ben Cleeves, Transportation
Chardae Caine, League of Municipalities
Jay Hall, Association of Counties


Statutes affected:
As introduced: 79-3602, 79-3606, 79-3615