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 Proffitt, Director Laura Kelly, Governor
Division of the Budget
January 25, 2023
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 53 by Senate Committee on Assessment and Taxation
In accordance with KSA 75-3715a, the following fiscal note concerning SB 53 is
respectfully submitted to your committee.
SB 53 would exclude coupons issued by a manufacturer, supplier, or distributor of a
product from the selling price of a product for the calculation of sales tax beginning on July 1,
2023.
Estimated State Fiscal Effect
FY 2023
SGF
FY 2023
All Funds
FY 2024
SGF
FY 2024
All Funds
Revenue -- -- ($1,700,000) ($2,000,000)
Expenditure -- -- $1,200 $1,200
FTE Pos. -- -- -- --
The Department of Revenue estimates that SB 53 would decrease state revenues by $2.0
million in FY 2024. Of that total, the State General Fund is estimated to decrease by $1.7 million
in FY 2024, while the State Highway Fund is estimated to decrease by $300,000 in FY 2024. This
bill also is 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:
The Honorable Caryn Tyson, Chairperson
Page 2—SB 53
FY 2025 FY 2026 FY 2027 FY 2028
State General Fund ($1,900,000) ($1,900,000) ($1,900,000) ($1,900,000)
State Highway Fund (400,000) (400,000) (400,000) (400,000)
($2,300,000) ($2,300,000) ($2,300,000) ($2,300,000)
To formulate the estimates for excluding manufacturer coupons from the calculation of
sales tax, the Department of Revenue reviewed national data on the use of coupons. According to
industry data, $3.4 billion of coupons are redeemed in the U.S. annually. Assuming that Kansas
represents approximately 1.0 percent of the national economy, Kansans redeem approximately
$34.0 million of coupons each year. This would result in a loss of approximately $2.0 million in
state sales tax revenue in FY 2024, including $1.7 million from the State General Fund and
$300,000 from the State Highway Fund. The Department indicates that the bill would require
$1,200 from the State General Fund in FY 2024 to update sales tax forms and publications.
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 Kansas Association of Counties and the League of Kansas Municipalities indicate that
the bill would provide a net reduction to local sales tax collections that are used in part to finance
local governments. The bill also has the potential to reduce revenues that are pledged to repay
STAR bond projects; however, it is unknown what impact this bill would have on the viability of
those projects. Any fiscal effect associated with SB 53 is not reflected in The FY 2024 Governor’s
Budget Report.
Sincerely,
Adam Proffitt
Director of the Budget
cc: Lynn Robinson, Department of Revenue
Brendan Yorkey, Department of Transportation
Wendi Stark, League of Kansas Municipalities
Jay Hall, Kansas Association of Counties