TOPEKA -- The Committee on Taxation is ready to move forward soon with Senate Bill 104 which, among other things, would protect Kansas consumers when they file their taxes.
The bill would require paid tax return preparers to have a signature and tax identification number on returns and claims or else face fines because during tax season a lot of preparers try to fool consumers and run away with their tax returns. This way the preparer can be tracked down and accounted for regardless if they work independently.
The bill also calls for a restoration of the golden years homestead property tax freeze act for Kansans 65 years and older or a disabled veteran which would allow them to file for a refund for an increase in property taxes over the base year. They would be able to receive tax benefits that would allow them to keep the same tax rates year after year if they are eligible and continue to apply.
Rep. Tom Holland (D-Baldwin City) said tax rates for homeowners keep increasing and that is forcing the elderly and disabled out of their homes. Financial website Smart Asset says "The state’s average effective property tax rate (annual property taxes paid as a percentage of home value) is 1.40%. This is the 15th highest of all states. "
Holland says that the homeowners would pay the bill, as the tax rates are set in Kansas, but would receive a refund check for the amount over the previous year. He said this would bring significant property tax savings for seniors and that more than 71,000 households would qualify.
Rep. Freda Warfield (D-Topeka) questioned how the bill helps veterans and to what extent they were required to be disabled in order to reap the tax benefits.
Holland told the committee the disabled veterans must be declared at least 50% disabled to apply for the homestead refund program. Holland also clarified that the homes receiving the tax refund must be making $50,000 or less a year and an appraised value on the homestead must be $350,000 or less.
Don Woodard, a representative for the Kansas Silver-Haired Legislature, spoke in support of the bill as a retiree.
“We feel that this does benefit those in the biggest need. As a 75-year-old making a lot less than $50,000 and my property is nowhere near $350,000. I would qualify as a disabled Vietnam veteran. This bill would help me keep my home and others like me.,” Woodard said.
With the bill in place, citizens like Woodard would only need to file on their K-40, Kansas Income Tax Return, to make a claim.
Eight companies filed testimonies supporting Senate Bill 104 including Jeremy Stohs, director of government Relations for H&R Block. Stohs says the bill would stop taxpayers from being cheated by fraudulent tax preparers as well as help the police track down the culprits before they could commit fraud against another customer. Stohs said he doesn’t want to stop volunteer tax preparers or fly-by preparers, but make sure they are doing right by people who can afford it the least. He explained that more than eight states have adopted this bill and seen great results.
The fiscal note is at about $4.5 billion for the program. The Department of Revenue could not predict when this should start leveling off but Holland assured the committee it would have the power to step in and set a limit if the fiscal implications got out of control.
Jay Hall, legislative policy director and general counsel of the Kansas Association of Counties was the only one who spoke in opposition of the bill. Although he agrees with the idea of the bill, he believes the timing would make it harder for county clerks who are creating and processing the tax rolls
or preparing for an election to get ahead if the date to report from the state to county officials is moved to Oct.15 instead of Sept. 1. Hall is also concerned with the extra amount of work placed on the counties to investigate fraud claims as it would call for additional staff and longer hours.
Rep. John Alcala (D-Topeka) fired back at Hall saying the only reason he was there was to try and stave off the additional work. Alcala said in his experience the only time the Kansas Association of Counties gets involved is when there are fiscal implications or more work added to their plate. Hall was unable to provide an otherwise valid point for being in the committee.
After Hall spoke, the Senate asked for the bill to be looked over once more by the House. Those who qualify for the golden years homestead property tax freeze may not apply for the homestead refund act or the safe senior tax credit act. If the bill is passed upon a final review, senior citizens can start their base tax freeze this upcoming year.
Samantha Gilstrap is a University of Kansas senior from Charlotte, North Carolina majoring in journalism.