Gov. Laura Kelly late Wednesday vetoed about $35 million in sales tax exemptions that would have benefited veterans, telecommunications companies, Exploration Place in Wichita and the Kansas Children’s Discovery Center in Topeka.
Just as she did in vetoing the $1.56 billion tax bill on Wednesday, Kelly said this assortment of tax breaks would put a burden on the general fund.
“The intent of (the bill) is on the right track to provide Kansans with sales tax relief,” Kelly said in a statement.
“However, the impact these tax cuts would have on the state general fund cannot be realized without knowing the total cost of all tax bills, including a fair, sustainable, and fiscally responsible tax relief package.”
Overall, this package of sales tax exemptions would have cost about $84 million over three years.
They would have started at about $24 million in the first two years and then grow to $35 million when a sales tax exemption for veterans started in fiscal year 2027.
The bill was passed 34-1 in the Senate and 102-17 in the House.
Here’s a quick look at what the bill would do:
Veterans
Create a sales tax exemption starting July 1, 2026, for Kansas veterans who’ve been honorably discharged and have a 100%, total, or unemployable permanent disability rating
sustained through military service. Sales of motor vehicles, alcohol, tobacco or electronic cigarettes would be excluded from the exemption. The benefit would be capped at $24,000 of taxable sales per year per person. Surviving spouses of eligible persons would continue to be eligible for the exemption until they are remarried.
Telecommunications
Provide a sales tax exemption for telecommunications companies with the promise the money would free up cash for expansion of high-speed internet services in Kansas. The bill would have extended a sales tax exemption to telecommunications companies for buying communications machinery and equipment or other infrastructure to provide internet service. The exemption would expire July 1, 2029. This bill was vetoed last year when it was packaged with an array of other measures, including some not popular with the governor. The exemption had been sought by AT&T and T-Mobile, who said the money they save will be put into high-speed internet investments in the state. They 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.
Schools for the blind, deaf
Exempts the Kansas State School for the Blind and Kansas State School for the Deaf from paying sales tax on purchases related to the building, maintenance and enlargement of facilities used for human habitation.
Discovery Center
Provide a sales tax exemption for the Kansas Children’s Discovery Center in Topeka for constructing, remodeling, furnishing or equipping a hands-on children’s museum with a mission to enhance the lives of children and enrich the communities it serves.
Exploration Place
Provide a sales tax exemption for Exploration Place in Wichita to construct, remodel, furnish or equip a riverfront amphitheater, a destination playscape, an education center and indoor renovations.
Fairgrounds
Provides a sales tax exemption for purchasing construction equipment and maintenance of buildings operated by the Kansas Fairgrounds Foundation. It also would apply to purchases made by a contractor constructing and maintaining fairgrounds facilities. For purchases made after Jan. 1, 2024, but before the start of the bill, sales tax refunds would be paid by the Department of Revenue.
Doorstep Inc.
Creates a sales tax exemption for purchases by or on behalf of Doorstep, Inc., for the purpose of providing short-term emergency aid to families and individuals in need
and providing information on services to promote long-term self-sufficiency.
Butchering
Creates a sales tax exemption for all sales of the services of slaughtering, butchering, custom cutting, dressing, processing and packaging of an animal for consumption when the animal is delivered or furnished by the customer and the meat is for use or consumption by the customer.
