Tax Law

State Net Capitol Journal – July 20, 2015; Kansas Keeping Some Tax Credits Secret

Budget & Taxes

KS Keeping Some Tax Credits Secret

According to Kansas’ Department of Revenue, in 2013 the state granted $622 million in income and privilege tax credits, allowing taxpayers to deduct various qualifying expenses from their taxes. But the state actually spent more than that amount on the credits. How much more - or even who all of the tax breaks went to - isn’t publicly available, however, because a longstanding Department of Revenue policy prevents the agency from disclosing the value of credits granted to fewer than five filers.

 “The rationale is that by law, taxpayer data is confidential. ... When we are dealing with taxpayer data for 5 or fewer taxpayers, there is a risk that disclosure of this data may in fact reveal confidential data concerning one or more taxpayers within that group,” said Jeannine Koranda, a spokeswoman for the agency.

She added that even revealing the aggregate total for the 31 credits granted to five or less taxpayers in 2013 would violate the agency’s policy.

Kansas Rep. Brandon Whipple (D), a member of the House Tax Committee, said that although the agency’s policy is based on a state law authorizing the agency to release tax information but barring it from releasing information about individual taxpayers, the agency’s “less than five” restriction seemed arbitrary to him.

 “It sounds like their interpretation is the most extreme possible where they’re pretty much saying we don’t even want to acknowledge it’s there.”

Senate Vice President Jeff King (R), meanwhile, said keeping the tax information confidential has impeded the work of lawmakers seeking in recent years to reduce the overall tax rate by cutting or eliminating individual credits and exemptions.

 “It’s very hard to do that effectively if there are certain tax credits we don’t even know what we’re spending on,” he said. “So as a member of the Senate, I am certainly interested in knowing all of the money we’re spending on tax credits....” (WICHITA EAGLE)

U.S. House Passes Transportation Aid Extension

The Republican-led U.S. House passed a bill last week that would prevent a looming suspension of federal highway funding to states. The bill would provide an $8 billion infusion to the federal Highway Trust Fund, enough to keep money flowing for state roads and highways through mid-December.

The White House welcomed the proposal, issuing a statement saying "the unfortunate reality is that, due to inaction," Congress needed more time to pass a longer-term transportation bill. But Congress has been trying to do that for six years, managing to approve only 34 short-term transportation funding extensions in that time instead.

The main sticking point has been that the chief revenue source for transportation funding, the federal gas tax, has been dwindling as automobiles have become more fuel efficient. And most lawmakers are reluctant to raise that tax. In fact it hasn’t been increased since 1993.

But the U.S. Senate’s Republican majority is working on a long-term solution that relies more on cost savings, including $31 billion over the next decade from reducing the rate of return on an investment account available to federal retirees and $17 billion from reducing the dividend the Federal Reserve pays to member banks.

The Republicans will have to reach an agreement on the issue quickly, with the U.S. Transportation Department’s authority to process payments to states expiring on July 31. (ASSOCIATED PRESS)

MD Launches Commission to Review Regulations

Maryland Gov. Larry Hogan (R) announced the launch of a new commission to determine which state regulations are making it hard to do business in the state.

 “For years, over-burdensome and out-of-control regulations were making it impossible for businesses to stay in Maryland, the governor said.

Hogan has tasked the all-volunteer, 10-member commission with spending the next three years examining every rule on the books and conducting hearings throughout the state to uncover how those rules impact “our primary mission of retaining, growing, and creating more businesses and jobs.”

But Democrats who control the state’s General Assembly said they’re way ahead of Hogan on the issue, having already passed legislation creating a commission that provided recommendations this year on how to promote economic development.

 “Larry Hogan should have known by now what the problems are and shouldn’t have needed three years to study the problem,” said Del. C. William Frick (D). (WASHINGTON POST, LEXISNEXIS STATE NET)

Budgets In Brief - July 20 2015

Democrats who control the ILLINOIS General Assembly failed to completely override Gov. Bruce Rauner's (R) vetoes of a new state budget last week. The state has been without a budget since the start of the new fiscal year on July 1 (CHICAGO TRIBUNE). * VIRGINIA Gov. Terry McAuliffe (D) announced a $553 million revenue surplus last week. The news comes less than a year after he announced a $2.4 billion projected budget shortfall, prompting government worker layoffs and a markup in the price of liquor (WASHINGTON POST). * The day before launching his presidential campaign, WISCONSIN Gov. Scott Walker (R) signed a two-year, $72.7 billion state budget, from which he vetoed 104 items (MILWAUKEE JOURNAL-SENTINEL). * OHIO added $526 million to its rainy day fund, raising its total balance to $2 billion (CLEVELAND.COM).

- Compiled by KOREY CLARK

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