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
March 6, 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 520 by Senate Committee on Assessment and Taxation
In accordance with KSA 75-3715a, the following fiscal note concerning SB 520 is
respectfully submitted to your committee.
SB 520 would provide a sales tax exemption for all not-for-profit organizations that operate
and administer public transportation services. The sales tax exemption would become effective
on July 1, 2024.
Estimated State Fiscal Effect
FY 2024 FY 2025 FY 2026
Expenditures
State General Fund -- -- --
Fee Fund(s) -- $1,800 --
Federal Fund -- -- --
Total Expenditures -- --
Revenues
State General Fund -- ($62,500) ($68,000)
Fee Fund(s) -- (13,500) (15,000)
Federal Fund -- -- --
Total Revenues -- ($76,000) ($83,000)
FTE Positions -- -- --
The Honorable Caryn Tyson, Chairperson
Page 2—SB 520
The Department of Revenue estimates that SB 520 would decrease state revenues by
$76,000 in FY 2025 and by $83,000 in FY 2026. Of those totals, the State General Fund is
estimated to decrease by $62,500 in FY 2025 and by $68,000 in FY 2026, while the State Highway
Fund is estimated to decrease by $13,500 in FY 2025 and by $15,000 in FY 2026. 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.
To formulate these estimates, the Department of Revenue reviewed data from the Kansas
Department of Transportation (KDOT), which reports that of 66 providers surveyed, ten
organizations reported that they are not exempt from sales taxation. Of the remaining provides, it
is estimated that the bill would reduce state sales tax on purchases of tangible personal property
and services by $76,000 in FY 2025 and $83,000 in FY 2026. According to the Department of
Revenue, reissuing sales tax publications and revising forms would cost $1,800 from the State
General Fund in FY 2025.
KDOT indicates that the bill would reduce state revenues to the State Highway Fund as
noted above. Any fiscal effect associated with SB 520 is not reflected in The FY 2025 Governor’s
Budget Report.
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: Lynn Robinson, Department of Revenue
Jay Hall, Kansas Association of Counties
Wendi Stark, League of Kansas Municipalities
Brendan Yorkey, Department of Transportation