The Kansas House on Thursday approved a $17 million yearly sales tax exemption for telecommunications companies with the promise that the money would free up cash for expansion of high-speed internet services in Kansas.
The House voted 108-13 for a bill that extends a sales tax exemption to the telecommunications companies for purchasing communications machinery and equipment. It now goes to the Senate.
The bill had been sought by AT&T and T-Mobile, who say the money they save will be put into high-speed internet investments in the state. The bill was amended on the House floor that the tax break expires in 2028.
Jim Jamison, president of AT&T Kansas, recently told lawmakers that the bill would allow telecommunications companies to connect more Kansans to high-speed broadband by exempting the equipment used to expand and improve their networks.
He said it would increase the number of Kansas homes and businesses to connect to high-speed fiber as well as expand wireless 5G networks.
The tax exemption is expected to cost the state about $16.8 million in the first year and about $17 million each subsequent year.
House Minority Leader Vic Miller tried to amend the bill so hygiene products would be exempted from sales tax. It was defeated 77-44.
Miller’s amendment would have applied to tampons, toilet tissues, toothbrushes, toothpaste, menstrual cups, mouthwash, panty liners and deodorants, among other products. Kansas is one of 22 states that charges a sales tax on tampons.
Gov. Laura Kelly has called for exempting feminine hygiene products from sales tax, and the issue bubbled up in last year’s governor’s race when then-Attorney General Derek Schmidt called for a similar tax break that had already been supported by Democrats.
“There are a number of reasons why we need to encourage everyone to have good hygiene,” Miller said. “In the end, it saves us tons and tons of dollars if we exercise good hygiene and stay healthy.”
The estimate of Miller’s amendment would have been about $20 million a year, about the same as the underlying bill.
“In times when we are addressing tax cuts, this is at the top of my list,” Miller said. “We should provide relief to the people who need it the most.”
The bill’s floor sponsor, Republican Rep. Brian Bergkamp of Wichita, opposed the amendment because he thought this type of legislation should be considered piecemeal and not added onto another bill on the House floor.
“If we want to address this issue, let’s take it through the regular process,” he said.
Telecommunications executives said 24 other states, including Missouri, Oklahoma and Colorado, have adopted similar legislation exempting communications equipment from sales tax purchases.
AT&T said it has been committed to closing the digital divide in Kansas, spending about $1.1 billion in expanding and improving its network in Kansas during the last five years and providing fiber to more than 250,000 homes and businesses.
A study done at the University of Kansas last year revealed there are more than 1 million Kansans living in areas lacking internet speeds sufficient for residents to participate in online education courses, stream video, or download and upload large files.
The study by researchers at the University of Kansas Institute for Policy & Social Research found there are large parts of the state where residents are unable to download at speeds of at least 100 Mbps, which is considered the benchmark for meeting the needs of contemporary households.
The study pinpointed areas of the state where internet speeds are lacking and don’t even meet the basic standard of what’s considered an adequate internet connection.
The study found that 87,000 people — or 3% of the state’s population — lived in 95 ZIP codes where they don’t even have the ability to download at 25 Mbps or upload at 3 Mbps, the minimum broadband internet speeds established by the Federal Communications Commission.
The researchers said their finding is similar to data reported by internet providers to the FCC, which indicates that 2.4% of Kansans live in census blocks with average internet speeds of less than 25/3 Mbps.
