Emporia's Longbine, Schreiber call for change in online sales tax policy after Kansas Attorney General decision Featured

Emporia's Longbine, Schreiber call for change in online sales tax policy after Kansas Attorney General decision KVOE News file photo

State Republicans, including Senate Vice President Jeff Longbine and 60th District Representative Mark Schreiber, are calling on Governor Laura Kelly to change the online sales tax collection executive order after Attorney General Derek Schmidt said she lacked the authority to take that step.

The Emporia lawmakers are concerned the policy, which is geared towards out-of-state retailers, could cause a negative ripple effect across Kansas and could trigger lawsuits against the state. Longbine says a sound online sales tax policy is crucial to protect local retailers.

The governor's executive order follows the US Supreme Court decision in South Dakota v. Wayfair, which lets states collect taxes on internet sales if the retailer has baseline sales amount or transaction number in the state -- in South Dakota's case, $100,000 in sales or at least 200 transactions.

Lawmakers had passed some internet sales tax provisions relating to out-of-state companies this past session, but the governor vetoed those, mentioning concerns about budget stability. The Republican plans would have established a floor of $100,000 in gross retail receipts before the online tax mechanism kicked in. Kelly's plan, according to Schreiber, taxes all out-of-state retailers regardless of their retail receipts. Schreiber also tells KVOE News part of the Republicans' goal was to link online sales tax increases with reductions in another tax.

Schmidt says Gov. Laura Kelly was out of bounds when she ordered collection of about $20 million from out-of-state online retailers and the Department of Revenue's policy was also unlawful because there was no public hearing before the new rule was finalized.

Both Kelly and Revenue Secretary Mark Burghart say
the executive order actually restated existing procedures for sales tax instead of establishing new policy -- and as such is legal.

Longbine says lawmakers won't have a chance to rectify the rule until the 2020 legislative session.

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Last modified on Thursday, 03 October 2019 08:05