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 22, 2021


The Honorable Adam Smith, Chairperson
House Committee on Taxation
Statehouse, Room 185A-N
Topeka, Kansas 66612
Dear Representative Smith:
SUBJECT: Fiscal Note for HB 2303 by Representative Toplikar
In accordance with KSA 75-3715a, the following fiscal note concerning HB 2303 is
respectfully submitted to your committee.
Under current law, the non-refundable food sales tax credit is restricted to taxpayers that
earn $30,615 or less and are over the age of 55, or disabled or blind, or have at least one dependent
under the age of 18 living with them the entire year; and the tax credit amount is determined by
multiplying the number of exemptions by $125 for the qualifying taxpayer. HB 2303 would make
the current non-refundable food sales tax credit a refundable tax credit beginning in tax year 2021.
The bill would now determine the food sales tax credit amount by tax filing status and could be
claimed by all taxpayers with income at or below the following federal adjusted gross income
levels:
Filing Status Income Level Credit Amount
Single $41,000 $248
Head of Household $50,000 $298
Married Filing Jointly $62,000 $372
Married Filing Separate $41,000 $248
The refundable food sales tax credit would not be available to taxpayers enrolled in the
federal food stamp program. The Department of Revenue would have the authority to write rules
and regulations to implement the bill.
Estimated State Fiscal Effect
FY 2021 FY 2021 FY 2022 FY 2022
SGF All Funds SGF All Funds
Revenue -- -- ($164,410,000) ($164,410,000)
Expenditure -- -- $263,928 $263,928
FTE Pos. -- -- -- 3.00
The Honorable Adam Smith, Chairperson
Page 2—HB 2303

The Department of Revenue estimates that HB 2303 would decrease State General Fund
revenues by $164,410,000 in FY 2022, $166,160,000 in FY 2023, and $67,920,000 in FY 2024.
To formulate these estimates, the Department reviewed tax return data from tax year 2019.
The Department created a simulated tax table for all taxpayers that would be eligible for the new
refundable food sales tax credit. The Department of Revenue estimates that 608,401 tax returns
would claim an additional $164,410,000 in refundable food sales tax credits beginning in FY 2022.
This number excludes approximately 94,000 households enrolled in the federal food stamp
program as reported by the Kansas Department for Children and Families as they would not qualify
for this tax credit under the provisions of the bill. The Department estimates that the number of
tax returns grows approximately 1.0 percent each year. The Department of Revenue indicates that
69,104 claimed $10,700,000 in non-refundable food sales tax credits in tax year 2019. The
estimate assumes approximately $10.0 million in non-refundable food sales tax credits would be
claimed in tax year 2021 or FY 2022 under the current non-refundable food sales tax credit.
The Department of Revenue indicates that it would require a total $263,928 from the State
General Fund in FY 2022 to implement the bill and to modify the automated tax system. The bill
would require the Department to hire 3.00 new Customer Service Representative FTE positions to
review and process state returns that include the new refundable food sales tax credit. 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. Any fiscal effect associated with HB 2303 is not reflected in The
FY 2022 Governor’s Budget Report.

Sincerely,

Adam Proffitt
Director of the Budget
cc: Lynn Robinson, Department of Revenue
Jeff Scannell, Department of Administration


Statutes affected:
As introduced: 79-32