Kansas’ tax receipts at the end of the 2020-21 fiscal year exceeded anticipated revenue levels by $758 million.
Gov. Laura Kelly attributed this growth to signs that efforts to strengthen the states’ economy are working. Others say it’s time to cut taxes.
“It is time for the state of Kansas to look at lowering its tax rates – sales, personal income, and corporate income – all should be discussed. We encourage the Kansas Legislature and Governor Kelly to look at our Kansas Tax Modernization study conducted by the Tax Foundation,” a statement provided by Kansas Policy Institue said. “It proposes very specific recommendations for reforming the state’s tax code that will bring pro-growth structural transformations to the state.”
Some of the recommendations from the Kansas Tax Modernization study include, for individual income tax, indexing tax provisions for inflation, enhancing the standard deduction, allowing an independent choice of itemization, rolling back excessive credits, and eliminating the Social Security tax cliff.
In the realm of corporate income tax, the Tax Foundation recommends removing international income from the tax base, locking in full expensing of capital investment, repealing the Throwback Rule, shifting to market sourcing of service income, conforming to federal treatment of net operating losses, and reviewing business tax incentives.
Since the report was released in December 2019, the Legislature has enacted a few of the recommendations already.
Income for the Kansas Department of Revenue was $8.9 billion during the fiscal year running from July 1, 2020, to June 30, 9.3%, greater than projected.
June tax receipts were $854 million for the state, which was $157 million or 22% more than the estimate, $110 million greater than June 2020 receipts.
Individual income taxes came in at $372 million in June, 15% greater than anticipated. Corporate income tax collection came in at $111 million, 136% greater than anticipated.
“The strong performances from both individual and corporate estimated tax would suggest that perhaps the capital gains from the stock market activity for individuals, and overall corporate profits continue to far exceed expectations,” Mark Burghart, secretary of the state Department of Revenue, told the Kansas Reflector.
This article was originally posted on Kansas closes fiscal year with $758 million above estimated tax receipts