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


March 1, 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 2358 by House Committee on Taxation
In accordance with KSA 75-3715a, the following fiscal note concerning HB 2358 is
respectfully submitted to your committee.
HB 2358 would provide a sales tax exemption for nonprofit integrated community care
organizations. To receive the sales tax exemption, the nonprofit integrated community care
organization would be required to be exempt from federal income taxes, certified to participate in
the Medicare Program as a hospice, and approved by the Kansas Department for Aging and
Disability Services.

Estimated State Fiscal Effect
FY 2021 FY 2021 FY 2022 FY 2022
SGF All Funds SGF All Funds
Revenue -- -- ($78,000) ($93,000)
Expenditure -- -- $1,200 $1,200
FTE Pos. -- -- -- --
The Department of Revenue estimates that HB 2358 would decrease state revenues by
$93,000 in FY 2022. Of that total, the State General Fund is estimated to decrease by $78,000 in
FY 2022, while the State Highway Fund is estimated to decrease by $15,000 in FY 2022. This
bill is also estimated to decrease local sales tax revenues by $38,000 in FY 2022. The Department
of Revenue indicates that this provision would have a similar fiscal effect in future fiscal years.
The Honorable Adam Smith, Chairperson
Page 2—HB 2358

The Department indicates that there is one known organization that would meet the
definition of a nonprofit integrated community care organizations and would qualify for this sales
tax exemption. According to the Department of Revenue, reissuing sales tax publications and
issuing the tax entity exemption certificate would cost $1,200 from the State General Fund in FY
2022.
The Kansas Department of Transportation indicates that the bill would reduce state
revenues to the State Highway Fund, as noted above. 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 2358 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: 79-3602, 79-3606