A bill exempting all groceries from state and local sales taxes was derailed Wednesday after it couldn’t gain any traction in a House committee.
The House tax committee declined to work the Senate’s food tax bill, which has drawn fire from local governments throughout the week.
Republican state Rep. Adam Smith, the committee’s chair, had scheduled the bill to be worked on Wednesday afternoon.
But no one on the committee made a motion to take up the legislation when they had a chance to bring the bill up for debate.
“Judging from the hearing and what we heard from the conferees, it would be my opinion that we could probably pass over that bill without objection of the committee,” Smith said.
Earlier in the week, local governments wielded their political muscle, telling the committee that they would be forced to raise property taxes or cut vital taxpayer services if the state barred them from collecting sales tax on food.
Smith said current law already takes the state sales tax on groceries to zero albeit in 2025 – something Gov. Laura Kelly wants to happen this year.
He also said there are other bills in the committee that eliminate just the state sales tax on food.
“If we’re worried about exempting local food, we really don’t need to run a bill because that’s what’s currently in statute,” he said.
“To my knowledge, that’s the only other bills that are out there just dealing with the state rate,” Smith said.
Smith gave committee members an opportunity to make a motion to work the bill, and no one responded.
With no response, Smith said the bill would go to “File 13,” a phrase used in the military that’s a euphemism for a trash can.
In an interview after the meeting, Smith said he anticipated that there wouldn’t be much appetite to work the bill after cities and counties inundated with lawmakers about how the legislation would blow holes in their budgets.
“It’s not dead. It’s just sitting in committee,” Smith said.
But he agreed that there probably wasn’t mush support for the bill in committee.
“If we brought it up, I doubt it would get any votes,” Smith said.
The bill started in the Senate as a proposal that would have eliminated the state and local sales taxes on just healthy foods by next year while other food items would have been taxed at the old rate of 6.5%
On the floor, the Senate amended the bill to exempt grocery items from state and local sales tax starting next year. Supporters said the amended bill was truly “axing the tax” on food in Kansas.
However, city and counties mounted opposition, showing up in force at a House committee hearing on Monday, making grave predictions about cutting services or raising property taxes, an issue of deep concern to lawmakers.
Democratic state Rep. Stephanie Clayton, a member of the tax committee from Overland Park, said it was impossible for her to support the bill.
“I have heard a tremendous amount from local governments both from within in my district and outside my district how this would completely devastate their ability to raise revenue,” Clayton said.
“For us, we see voting for that Senate bill as basically voting to increase property taxes,” Clayton said. “If I voted in favor of that bill, I would basically be saying to my constituents, ‘Oh, hello, I want to raise your property tax.’
“Given the way valuations have been jumping in northeast Johnson County, including on my own property, a lot of people are really upset about that,” she said.
Senate President Ty Masterson introduced a bill that that would have set aside $220 million make local governments affected by the tax bill whole.
But local governments appearing at a hearing Wednesday reacted to the idea coolly, saying they needed to be guaranteed of replacement funding in the years ahead and worried that funding appropriated today could be taken away tomorrow.
House Speaker Dan Hawkins said House and Senate Republicans have a shared vision of broad based tax cuts that benefit all Kansans.
“We may differ slightly on the details, but I’m confident those will be worked out in short order and we will pass a tax package that does just that,” he said.