Committee hears arguments for and against letting cities and counties levy earnings taxes
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Summary
House Bill 23-85 would allow cities or counties to levy up to a 1% earnings tax on nonresident workers, with at least half the revenue earmarked for property tax relief and voter approval required; proponents said it provides local revenue options, while opponents warned it could deter investment and raise equity and military‑pay issues.
The Committee on Taxation took testimony on House Bill 23-85, which would permit cities or counties to impose an earnings tax of up to 1% on individuals who work in the jurisdiction but do not reside there. The measure requires local governing board approval and a subsequent election for implementation; the tax must be presented to voters for continuation every 10 years, and at least 50% of revenue received must be used for property tax reduction.
Proponents included county commissioners and county-association representatives who said the earnings tax would give counties with large nonresident workforces an option to generate revenue and lower property taxes for residents. Mike Taylor of the Kansas County Commissioners Association said some counties (for example Wyandotte) have a substantial share of jobs filled by nonresidents and that local option earnings taxes have raised significant revenue in other jurisdictions. Leavenworth County Commissioner Jeff Culbertson argued giving counties choice would let local voters decide a different revenue mix to reduce property burdens.
Opponents questioned competitiveness and fairness. Eric Stafford of the Kansas Chamber said local earnings taxes can deter investment and make Kansas less competitive compared with neighboring jurisdictions. Representative Sappington described a constitutional concern, calling the measure "taxation without representation" for nonresidents who would be taxed without a local ballot recourse. Mike Kelly of the Military Officers Association cautioned that the bill as written does not exempt military pay, retired pay or certain veteran benefits; he cited federal domicile protections (50 U.S.C. §3901) and urged amendments exempting military compensation.
Committee members raised practical questions: whether a resident who works in the same county would pay, how county and city taxes might stack (both could impose an earnings tax), and whether the tax would apply to visiting teams or remote employees. The reviser said the drafting leaves various administrative questions — days worked, payroll withholding, and interaction with employer collection — that need statutory clarification.
What happens next: Committee heard proponent, opponent and neutral testimony, and received a range of technical questions. Two requests for bill introductions were approved later in the session; HB 23-85 remains at the committee hearing stage pending potential amendments and additional administrative detail.