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Archive for Sunday, March 31, 2013

Legislative leaders want study of tax exemptions

March 31, 2013

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Kansas government
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— A fight over the tax status of for-profit fitness clubs may lead to a review of many tax exemptions on the books in Kansas.

“There is inequity in our tax law, and it needs to be addressed,” said Senate President Susan Wagle, R-Wichita.

Wagle said she wants a study done after the legislative session on the issue of non-profit organizations, such as the YMCA, receiving tax exemptions.

Some conservative Republicans have made it clear that they oppose tax breaks for non-profit groups that compete with private businesses.

The issue arose during debate over Senate Bill 72, which would exempt private health clubs from local property taxes.

Conservatives said it was unfair that the private clubs paid local taxes and had to compete with YMCAs, which are tax-exempt.

The measure was approved, 25-14.

The legislation was supported primarily by Rodney Steven, who owns Genesis Health Clubs.

Democrats and some Republicans opposed the measure, saying it would deprive local governments of needed property tax revenue.

They also said that non-profits like the YMCA earn their tax-exempt status by providing community services, such as after-school programs, affordable childcare, and the promotion of youth sports.

Democrats noted that Steven made large campaign contributions to Republican legislative leaders, but those legislators have denied his contributions had anything to do with their position on the bill.

Senate Minority Leader Anthony Hensley, D-Topeka, said he would welcome a tax review in which the Legislature ends all tax exemptions “that do not relate to people’s survival” and then have the groups affected by the end of those exemptions come to the Legislature and argue why they are needed.

“That would be a good process,” Hensley said.

But Hensley noted that attempts in the past to end exemptions have failed, and in some cases led to more exemptions.

House Minority Leader Paul Davis, D-Lawrence, observed, “The budget reality and the political reality is that removing sales tax exemptions is a very, very difficult thing to do.”

In 2010, there was a proposed non-binding resolution in support of a moratorium on granting new tax exemptions, tax credits and economic development incentives that involved the use of employer withholding taxes.

At the time, then-Kansas Department of Revenue Secretary Joan Wagnon said that since 1985, the number of sales tax exemptions had grown from 30 to 96; income tax credits from six to 43; and property tax exemptions from 43 to 102.

But the proposed moratorium went nowhere in the Legislature. The Kansas Chamber of Commerce, several local chambers of commerce and other business groups were opposed to resolution, saying it could impede economic development.

Comments

Mike1949 1 year, 8 months ago

"but those legislators have denied his contributions had anything to do with their position on the bill", yea, right!

question4u 1 year, 8 months ago

Just start a for-profit church, pay off some legislators, and there will be no more tax exemptions for churches in Kansas. After all, Kansas legislators aren't hypocrites, are they?

Why should non-profit churches have an unfair advantage over for-profit churches? That doesn't stimulate business in Kansas. For-profit churches can generate millions, so that's the kind that we need in Kansas. The free-loading non-profit churches should have to pay taxes just like the for-profit churches. That will level the playing field. The tax exemptions that non-profit churches receive allow them to offer services even to poor people who don't pay their full tithe. That undercuts the efforts of for-profit churches for make a profit and create jobs.

If poor people want to attend a church, they should work harder instead of expecting free services with the state footing the bill. Enough of the free-loading non-profit churches and their free-loading congregations that are killing the Kansas economy.

Tomato 1 year, 8 months ago

Well, in the case of churches, past Supreme Court decisions would probably get in their way. Churches can't be lumped in with other non-profits because of their special status, which is defended by the constitution and Supreme Court precedent.

I'll admit, that those kinds of details don't stop them when abortion is in question - but it probably should.

That said, it seems to me that all "non-profits" should be taxed in proportion to the salaries that they pay their top-five executives.

voevoda 1 year, 8 months ago

Just a month ago, the State Legislature was discussing legislation to ban any advocacy of "sustainability" by any public agency. KU actually has a "Center for Sustainability," IKU57. So I'm confused by your assertion, IKU57. Who, exactly, is preaching an ideology not consistent with sustainability?

George_Braziller 1 year, 8 months ago

Except they aren't competing. Private businesses are in business to make money which is why, in the case of for-profit fitness clubs, they charge everyone a membership fee. Not-for-profits may charge a nominal fee for a service but it's used to cover the expenses related to services that are available for free. For most non-profits revenue and expenses are equal so the ending balance for the year is zero.


"Some conservative Republicans have made it clear that they oppose tax breaks for non-profit groups that compete with private businesses."

Mike1949 1 year, 8 months ago

Sounds like a business man doesn't want to compete with the YMCA!

Bob Reinsch 1 year, 8 months ago

Yeah... there's no difference between Genesis Health Club and the YMCA. (Facepalm)

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