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Retailers, dealers and business groups urge committee to approve small remittance credit in Senate Bill 109
Summary
Retail and hospitality witnesses and business groups backed Senate Bill 109, saying it would modestly compensate retailers for the costs of collecting Kansas sales tax by providing a 1.5% remittance credit capped at $300 per month.
Retail and hospitality witnesses told the Kansas Senate Assessment and Taxation Committee that Senate Bill 109 would provide modest, needed relief to retailers for the cost of collecting state sales and compensating use tax, while some senators questioned the measure’s fiscal impact and alternatives.
Amelia (staff member) opened the hearing, saying Senate Bill 109 would authorize a remittance credit to retailers equal to 1.5% of the remitted tax, with a monthly cap of $300 per retailer; the bill would take effect upon publication in the statute book. "SB 109 provides a retailer a small benefit, obviously, of up to $300 a month for collecting the state's tax," said Chris Arnold, owner of River City Brewing Company in Wichita, who testified in support on behalf of himself and the Kansas Restaurant and Hospitality Association.
Arnold described direct and indirect collection costs, saying his business pays an average of 2.78% in credit-card fees on transactions and that credit cards accounted for 89.5% of his store's transactions. "If we remitted to the state $100,000 in taxes, I would pay $2,780 to the card processor to process that fee," he said. Arnold estimated he spent about $7,500 in fees last year and framed SB 109 as a narrow way to offset collection costs.
Don McNeely, president of the Kansas Auto Dealers Association, told the committee that franchise new-car dealers account for roughly 17% to 22% of the state’s sales-tax collections depending on the year, and that in 2023 Kansas dealers collected $556,000,000 in sales tax on roughly $7.5 billion in annual sales. He emphasized dealers’ complexity in applying sales-tax rules for vehicle sales and suggested some states shift collection to title or county processes.
Dan Murray, Kansas state director for the National Federation of Independent Business, said small retailers prioritize relief for collection costs but acknowledged competing budget priorities; a committee member noted the bill’s fiscal note was about $60 million a year. William Wilk, senior director of government affairs for the Kansas Chamber of Commerce and the Kansas Retail Council affiliate, summarized approaches in other states and noted that 30 states offer some form of retailer relief. Wilk also said the Kansas Department of Revenue has agreements with Missouri, Oklahoma and Nebraska that permit collection‑related discounts in certain cross‑state situations.
Committee members discussed alternatives and related issues: Senator Peck proposed evaluating whether vehicle sales-tax collection could move from dealers to counties to reduce the bill’s fiscal note; committee staff agreed to request additional information on vehicle taxes and to explore whether tax collection at the county level would alter the fiscal impact. Senator Korsen and others pressed witnesses on prioritization given the bill’s estimated fiscal cost.
No formal committee vote was taken during the hearing. The committee closed the SB 109 hearing after hearing proponent testimony and moved to a scheduled briefing from Legislative Post Audit.
The record contains multiple factual claims that the committee asked staff to verify, and members directed staff to gather additional data on vehicle titling/collection practices and the fiscal implications of alternative collection points.
