Gov. Kelly proposes taxing streaming services, improved collection of online sales tax in exchange for standard deduction
(The Center Square) – Kansas Gov. Laura Kelly on Tuesday pitched what she said is a revenue-neutral proposal that would impose new taxes on digital products such as video streaming services and require marketplace facilitators to collect sales taxes on online purchases.
With the estimated $97 million in new revenue for the state, Kelly said she would increase Kansas’s standard tax deduction by 20% in 2021 and 35% in tax year 2022.
“COVID-19 has brought unprecedented challenges for hard-working Kansans, their families, and their businesses,” Kelly said in a statement. “We know they need relief – and they need it as soon as possible. Our proposal is an amendment to Senate Bill 22, that will provide tax relief to the vast majority of Kansas families and assist in our state’s economic recovery from the COVID-19 pandemic.”
Kelly said 94% of Kansans would see a tax cut as part of her proposal, according to a news release from the governor’s office.
Kansas currently applies its sales tax to online retailers, but Kelly said out-of-state businesses are able to skirt the tax. Instead, Kelly’s proposal would require a marketplace facilitator to collect the sales tax and remit it to the state. Kansas is one of three states that has not enacted a marketplace facilitator provision, she said.
“When out-of-state retailers can duck taxes, there is no way for the local clothing store up the street or the local book store to try and compete with out of state prices,” Kelly said. “By requiring marketplace facilitators to collect use tax on out-of-state products, we level the playing field for Kansas main street businesses.”
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