Preparing for the 2016 Kansas Legislative Session

The most significant action on the Kansas side this year will revolve around the issues of budget and taxation.  The state continues to struggle with a significant budget gap, meaning all deductions, exemptions, and credits could be targeted as revenue raisers.  KCHBA and other members of the Kansas Building Industry Association (KBIA), feel it is vital to oppose any changes in state tax policy that adversely impact home ownership, including efforts to eliminate the Mortgage Interest Deduction (MID) and property tax deductions. 

KCHBA staff recently attended a two day hearing in Topeka convened by the Kansas Legislature’s 2015 Special Committee on Taxation.  KSA 79-3603(p) currently allows for a sales tax exemption on labor costs in residential and commercial construction, which is critically important to anyone wishing to affordably build, buy or renovate a home in the state of Kansas.  Labor activities falling under this exemption include services essential to construction such as framing, siding, roofing, digging, excavating, engineering and architectural design and planning.  According to the Kansas Dept. of Revenue, the removal of this exemption would amount to a $127 million tax increase on builders in 2016 alone.  KCHBA is eager to work with the 2016 KS Legislature in pursuit of policies that do not burden home builders and buyers with increased costs resulting from changes in the tax code.  The next Committee meeting will take place on December 9, during which the legislators plan to roll out their proposals for the upcoming session.

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