Kansas lawmakers return to tax fight involving pizza magnate

? The Kansas Senate’s top Republican is pushing to override GOP Gov. Sam Brownback’s veto of a bill enmeshed in a multi-million dollar tax dispute between the state and a retired pizza magnate.

Senate President Susan Wagle said Brownback “turned his back on Kansas taxpayers” earlier this month when he rejected the bill over a provision dealing with how tax disputes are handled. Lawmakers expect to vote on overriding the veto Wednesday, when they also have a brief ceremony formally adjourning their annual session.

The disputed provision would have ensured that any taxpayer losing in a dispute before the Board of Tax Appeals could seek another full trial in district court before taking the case to the state Court of Appeals for a more limited review.

Gene Bicknell

Legislators are considering the issue as Gene Bicknell fights for a refund of $42.5 million in state income taxes paid under protest in 2013. Bicknell once owned more Pizza Hut franchises than anyone else in the U.S. He grew up in Pittsburg and ran unsuccessfully for the Republican nomination for governor in 1994.

Bicknell moved to Florida before selling his company in 2006. He and the state disagree over whether, based on activities such as charitable contributions, he was still a Kansas resident in 2005 and 2006.

Bicknell has publicly likened Brownback’s actions to “tax extortion,” while the governor has argued the bill would have given Bicknell and other wealthy taxpayers special treatment. Both chambers approved the final version unanimously — setting up a potentially rare rebuke of a Republican governor by a GOP-dominated Legislature.

“We would certainly like them to take a shot at an override,” said Mike O’Neal, president and CEO of the powerful Kansas Chamber of Commerce. “It was pretty obvious that this was targeted at one particular tax issue.”

Bicknell’s tax dispute is large enough that the state could face budget complications if it loses. Kansas has struggled to balance its budget since GOP lawmakers slashed personal income taxes at Brownback’s urging in 2012 and 2013 in an effort to stimulate the economy, creating an ironic backdrop for the dispute.

A 2014 law gave taxpayers the right to ask a district court to review decisions by the Board of Tax Appeals, whose members are appointed by the governor. But some judges haven’t interpreted the law as allowing them to take new evidence, and supporters of this year’s bill contend they’re clarifying that point.

Brownback pushed for a narrower version applying the fix only to property tax disputes, which mostly affect cities’ and counties’ revenues. Wagle and other senators balked.

“This is a taxpayer rights issue,” Wagle said last week in a statement, saying the bill would have benefited every Kansan.

But Brownback said in his veto message that the bill would have allowed a district court to “decide all of the issues over again,” wasting time, effort and money. Brownback spokeswoman Eileen Hawley suggested the bill would have changed the rules “simply to provide an advantage to a single wealthy taxpayer.”

“This bill sends the wrong message: that an individual with substantial resources who loses a matter against the state can get another chance in the Statehouse,” Hawley said.

Overriding a veto requires two-thirds majorities in both chambers, and the House would vote Wednesday if Wagle’s effort is successful in her chamber.

Though the previous votes were unanimous, Sen. Tom Holland, of Baldwin City, the Senate tax committee’s ranking Democrat, acknowledged he’s now having misgivings. He said he’s not sure senators reviewed the disputed provision thoroughly enough and doesn’t see it helping taxpayers who can’t afford to “litigate forever.”

“Is that an equitable playing field for all taxpayers?” he said.