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 15, 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 2195 by Representative Pittman, et al.
In accordance with KSA 75-3715a, the following fiscal note concerning HB 2195 is
respectfully submitted to your committee.
HB 2195 would provide a sales tax exemption for farm products sold at a farmers’ market.
The bill lists the farm products that would qualify for this sales tax exemption, including fresh
fruits; vegetables; mushrooms; nuts; eggs; honey; maple syrup; flowers; nursery stock and other
horticultural commodities; livestock food products, including meat, milk, cheese and other dairy
products; food products of aquaculture, including fish, oysters, clams, mussels, and other
molluscan shellfish taken from the waters of the state; products from any tree, vine, plant, and
flower; or any of the products that have been processed, including baked goods made with farm
products. The bill also includes a definition of a farmers’ market.

Estimated State Fiscal Effect
FY 2019 FY 2019 FY 2020 FY 2020
SGF All Funds SGF All Funds
Revenue -- -- ($189,000) ($225,000)
Expenditure -- -- $1,800 $1,800
FTE Pos. -- -- -- --
The Department of Revenue estimates that HB 2195 would decrease state revenues by
$225,000 in FY 2020. Of that total, the State General Fund is estimated to decrease by $189,000
in FY 2020, while the State Highway Fund is estimated to decrease by $36,000 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 the decrease in state sales tax revenues could increase to approximately
The Honorable Steven Johnson, Chairperson
Page 2—HB 2195

$375,000 per year if the term common marketplace in the farmers’ market definition also includes
farm-to-table operations, including certain food cooperatives. According to the Department,
reissuing sales tax publications and to develop notices and guidance to taxpayers on the
administration of the sales tax exemption would cost $1,800 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. KDOT indicates that when the state
receives lower State Highway Fund dollars it may be required to make corresponding reductions
to planned expenditures for projects funded under the comprehensive transportation plan, known
as T-WORKS.
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 2195 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: 79-3606