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


January 22, 2020


The Honorable Steven Johnson, Chairperson
House Committee on Taxation
Statehouse, Room 185A-N
Topeka, Kansas 66612
Dear Representative Johnson:
SUBJECT: Fiscal Note for HB 2442 by House Committee on Taxation
In accordance with KSA 75-3715a, the following fiscal note concerning HB 2442 is
respectfully submitted to your committee.
Under current law, the Department of Revenue is required to include a line on all individual
income tax returns for the payment of compensating use taxes, and include instructions on the tax
forms that provide an explanation of an individual’s obligation to pay use tax on items purchased
from sellers that do not collect Kansas compensating use and retail sales taxes. HB 2442 would
remove this line on the individual income tax form and remove this item from the instructions
beginning in tax year 2020 as a result of the Department of Revenue’s Notice 19-04 that requires
remote sellers doing business in Kansas to collect and remit applicable sales and use taxes. The
bill would also remove the method to calculate the amount of use tax that is owed.
The Department of Revenue reports that for tax year 2018, the total amount of use tax
reported on K40 tax returns was $1,297,174. Of that amount, $830,160 was deposited in the State
General Fund, $159,940 was deposited in the State Highway Fund, and $307,074 was passed to
local governments. Although the Department of Revenue’s Notice 19-04 requires remote sellers
doing business in Kansas to collect and remit applicable sales and use taxes, enactment of HB
2442 has the potential to reduce use tax collections from individual taxpayers because the
opportunity to remit would not be there.
The Department indicates that the bill would require $64,511 from the State General Fund
in FY 2021 to implement the bill and to modify the automated tax system. The required
programming for this bill by itself would be performed by existing staff of the Department of
The Honorable Steven Johnson, Chairperson
Page 2—HB 2442

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. Any fiscal effect associated with HB 2442 is not
reflected in The FY 2021 Governor’s Budget Report.


Sincerely,

Larry L. Campbell
Director of the Budget


cc: Lynn Robinson, Department of Revenue


Statutes affected:
As introduced: 79-3221o