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
January 30, 2025
The Honorable Adam Smith, Chairperson
House Committee on Taxation
300 SW 10th Avenue, Room 346-S
Topeka, Kansas 66612
Dear Representative Smith:
SUBJECT: Fiscal Note for HB 3098 by House Committee on Taxation
In accordance with KSA 75-3715a, the following fiscal note concerning HB 2098 is
respectfully submitted to your committee.
HB 2098 would provide a sales tax exemption for any non-profit theater that creates and
produces novel works for concerts or productions; employs a full-time theater staff; has a board of
directors; is dedicated to providing a strong educational commitment to its local community; and
is committed to providing ongoing live theater as an art form using available local resources. The
sales tax exemption would become effective on July 1, 2025.
Estimated State Fiscal Effect
FY 2025 FY 2026 FY 2027
Expenditures
State General Fund -- $1,340 --
Fee Fund(s) -- -- --
Federal Fund -- -- --
Total Expenditures -- $1,340 --
Revenues
State General Fund -- ($139,000) ($139,000)
Fee Fund(s) -- (30,500) (30,500)
Federal Fund -- -- --
Total Revenues -- ($169,500) ($169,500)
FTE Positions -- -- -- The Honorable Adam Smith, Chairperson
Page 2—HB 2098
The Department of Revenue estimates that HB 2098 would reduce state revenues by
$169,500 in FY 2026. Of this amount, State General Fund revenues are estimated to decrease by
$139,000, while State Highway Fund revenues are estimated to decrease by $30,500. The bill is
also estimated to decrease local revenues by $60,500 in FY 2026. The Department indicates that
similar results would also occur in future fiscal years.
To formulate these estimates, the Department of Revenue reviewed sales tax collection
data from the six non-profit theaters that have been identified statewide that meet the criteria
outlined in the bill. According to the Department of Revenue, reissuing sales tax publications and
issuing tax entity exemption certificates would cost $1,340 from the State General Fund in FY
2026.
The Kansas Department of Transportation indicates that the bill would reduce state
revenues to the State Highway Fund, as noted above. Any fiscal effect associated with HB 2098
is not reflected in The FY 2026 Governor’s Budget Report.
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.
Sincerely,
Adam C. Proffitt
Director of the Budget
cc: Lynn Robinson, Department of Revenue
Brendan Yorkey, Department of Transportation
Jay Hall, Kansas Association of Counties
Wendi Stark, League of Kansas Municipalities