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
Adam Proffitt, Director Laura Kelly, Governor


February 8, 2021


The Honorable Caryn Tyson, Chairperson
Senate Committee on Assessment and Taxation
Statehouse, Room 123-E
Topeka, Kansas 66612
Dear Senator Tyson:
SUBJECT: Fiscal Note for SB 112 by Senator Pittman
In accordance with KSA 75-3715a, the following fiscal note concerning SB 112 is
respectfully submitted to your committee.
SB 112 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 or other bee products; maple syrup or maple
sugar; 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 2021 FY 2021 FY 2022 FY 2022
SGF All Funds SGF All Funds
Revenue -- -- ($189,000) ($225,000)
Expenditure -- -- $1,200 $1,200
FTE Pos. -- -- -- --
The Department of Revenue estimates that SB 112 would decrease state revenues by
$225,000 in FY 2022. Of that total, the State General Fund is estimated to decrease by $189,000
in FY 2022, while the State Highway Fund is estimated to decrease by $36,000 in FY 2022. 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
The Honorable Caryn Tyson, Chairperson
Page 2—SB 112

Revenue indicates that the decrease in state sales tax revenues could increase to approximately
$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 $1,200 from the State General Fund in FY
2022.
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.
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 SB 112 is not reflected in The FY 2022
Governor’s Budget Report.


Sincerely,

Adam Proffitt
Director of the Budget

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

Statutes affected:
As introduced: 79-3606