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 Proffitt, Director Laura Kelly, Governor

February 16, 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 111 by Senator Pittman
In accordance with KSA 75-3715a, the following fiscal note concerning SB 111 is
respectfully submitted to your committee.
Under current law, taxpayers are required to pay state income taxes on certain gambling
winnings but are not allowed to deduct any losses from gambling. SB 111 would allow 100.0
percent of gambling losses claimed on federal income tax returns to be claimed as an itemized
deduction on state income tax returns beginning in tax year 2021 and in each future tax year.

Estimated State Fiscal Effect
FY 2021 FY 2021 FY 2022 FY 2022
SGF All Funds SGF All Funds
Revenue -- -- ($10,000,000) ($10,000,000)
Expenditure -- -- $61,350 $61,350
FTE Pos. -- -- -- --
The Department of Revenue estimates that SB 111 would decrease State General Fund
revenues by $10.0 million in FY 2022 and in each future fiscal year. To formulate this estimate,
the Department reviewed Internal Revenue Service data on gambling losses claimed on federal tax
returns. The Department of Revenue estimates that Kansas taxpayers would claim approximately
$175.0 million in gambling losses in tax year 2021 under the provisions of the bill, which would
reduce state income tax collections by approximately $10.0 million in tax year 2021 or FY 2022.
The Honorable Caryn Tyson, Chairperson
Page 2—SB 111

The Department of Revenue indicates that it would require a total of $61,350 from the State
General Fund in FY 2022 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 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
The Department of Administration indicates that adjusting state income tax collections has the
potential to have a fiscal effect on the amount of revenue collected from its debt setoff program.
This program intercepts individual income tax refunds and homestead tax refunds and applies
those amounts to debts owed to state agencies, municipalities, district courts, and state agencies in
other states. Debts include, but are not limited to child support, taxes, educational expenses, fines,
services provided to the debtor, and court ordered restitution. As the dollar amounts of refunds
are increased, the amount available for possible debt setoffs is also increased. However, the
Department is unable to make an estimate of the amount of additional debts setoffs that will be
intercepted as a result of the bill.
The Kansas Lottery and the Kansas Racing and Gaming Commission indicate that the bill
would have no fiscal effect on each of their operations. The Kansas Lottery indicates that the bill
has the potential to increase the amount wagered at state-owned gaming facilities instead of at
gaming facilities from neighboring states that allow deductions for gambling losses. However, the
Kansas Lottery does not have data to make a precise estimate of the additional amount that would
be wagered at state-owned gaming facilities or the impact on the state’s share of proceeds from
these gaming facilities that would be transferred to the Expanded Lottery Act Revenues Fund and
the Problem Gambling and Addictions Grant Fund as a result of the bill. Any fiscal effect
associated with SB 111 is not reflected in The FY 2022 Governor’s Budget Report.


Adam Proffitt
Director of the Budget

cc: Keith Kocher, Lottery
Lynn Robinson, Department of Revenue
Jeff Scannell, Department of Administration
Brandi White, Racing & Gaming Commission

Statutes affected:
As introduced: 79-32