Division of the Budget
Landon State Office Building Phone: (785) 296-2436
900 SW Jackson Street, Room 504 adam.c.proffitt@ks.gov
Topeka, KS 66612 http://budget.kansas.gov
Adam C. Proffitt, Director Laura Kelly, Governor
Division of the Budget
February 20, 2024
The Honorable Caryn Tyson, Chairperson
Senate Committee on Assessment and Taxation
300 SW 10th Avenue, Room 548-S
Topeka, Kansas 66612
Dear Senator Tyson:
SUBJECT: Fiscal Note for SB 435 by Senate Committee on Federal and State Affairs
In accordance with KSA 75-3715a, the following fiscal note concerning SB 435 is
respectfully submitted to your committee.
SB 435 would provide a sales tax exemption for period products, diapers, and incontinence
products beginning on July 1, 2024. The bill includes definitions for period products, diapers, and
incontinence products.
Estimated State Fiscal Effect
FY 2024 FY 2025 FY 2026
Expenditures
State General Fund -- -- --
Fee Fund(s) -- $1,200 --
Federal Fund -- -- --
Total Expenditures -- --
Revenues
State General Fund -- ($7,200,000) ($7,800,000)
Fee Fund(s) -- (1,500,000) (1,700,000)
Federal Fund -- -- --
Total Revenues -- ($8,700,000) ($9,500,000)
FTE Positions -- -- --
The Honorable Caryn Tyson, Chairperson
Page 2—SB 435
The Department of Revenue estimates that SB 435 would decrease state revenues by $8.7
million in FY 2025. Of that total, the State General Fund is estimated to decrease by $7.2 million
in FY 2025, while the State Highway Fund is estimated to decrease by $1.5 million in FY 2025.
This bill is also estimated to decrease local sales tax revenues; however, the specific estimate of
lower local sales tax revenues was not calculated by the Department of Revenue. The fiscal effect
to state revenues during subsequent years would be as follows:
FY 2026 FY 2027 FY 2028 FY 2029
State General Fund ($7,800,000) ($7,800,000) ($7,800,000) ($7,800,000)
State Highway Fund (1,700,000) (1,700,000) (1,700,000) (1,700,000)
($9,500,000) ($9,500,000) ($9,500,000) ($9,500,000)
To formulate these estimates, the Department of Revenue reviewed data from the U.S.
Bureau of Labor Statistics Consumer Expenditure Survey and the Kansas Department of Health
and Environment. According to the Department of Revenue, reissuing sales tax publications and
revising forms would cost $1,200 from the State General Fund in FY 2025.
The Kansas Department of Transportation (KDOT) indicates that the bill would reduce
state revenues to the State Highway Fund as noted above. KDOT indicates that when the state
receives lower State Highway Fund dollars it may be required to make corresponding reductions
to planned expenditures for projects funded under the comprehensive transportation plan. The
fiscal effect associated with SB 435 is partially reflected in The FY 2025 Governor’s Budget
Report, which includes a sales tax exemption for only children’s diapers and feminine hygiene
products.
The Kansas Association of Counties and the League of Kansas Municipalities indicate the
bill would provide a net reduction to local sales tax collections that are used in part to finance local
governments. This bill has the potential to reduce revenues that are pledged to repay STAR bond
projects; however, it is unknown what impact the bill would have on the viability of those projects.
Sincerely,
Adam C. Proffitt
Director of the Budget
cc: Jay Hall, Kansas Association of Counties
Lynn Robinson, Department of Revenue
Wendi Stark, League of Kansas Municipalities
Brendan Yorkey, Department of Transportation