13 June 2017 Kansas law increases personal income tax rates for 2017-2018, 2017 withholding tables to be revised Recently enacted SB 30 rolls back Kansas Governor Brownback's six-year income tax reduction by expanding the number of tax brackets from two to three and increasing the tax rates associated with the brackets. The increase is intended to offset a budget shortfall. Because the rate increase is effective for calendar year 2017, a Kansas Department of Revenue representative tells us that revised withholding tables will soon be issued. On June 6, 2017, the bill was passed by the legislature, vetoed by the governor, and then enacted by overriding the governor's veto. A similar bill was vetoed by the governor earlier this year. Effective January 1, 2017, the lowest income tax rate is increased to 2.9%, up from 2.6%; the middle rate is increased to 4.9%, up from 4.6%; and the new highest rate is 5.2%. These rates increase again in 2018 by 0.2% to 0.5%. Statutory provisions that would have provided for income tax rate reductions in future years when the state general fund increased were removed from the law. The bill provides that no taxpayer will be assessed penalties and interest resulting from an underpayment of income tax due to SB 30 as long as the underpayment is rectified by April 17, 2018. According to Governor Brownback, "Earlier this year, I vetoed a tax increase that threatened to crush the Kansas economy, punishing individual Kansans and their families. Today, with Senate Bill 30, the legislature is looking to hike rates on Kansans even higher. Senate Bill 30 is a $1.2 billion tax hike, making it the largest in state history. This is bad for Kansas and bad for the many Kansans who would have more of their hard-earned money taken from them. Additionally, this tax increase is still retroactive and will affect individual families and small businesses in the 2017 tax year. Retroactively applying new taxes in the middle of the year is irresponsible and will harm families and individuals who are working to make ends meet." A Department of Revenue representative told us that revised income tax withholding tables will soon be released, perhaps as soon as the week of June 12, 2017. We will issue another alert when this occurs. The original version of the bill would have changed the Form W-2 deadline from February 28 to January 31 effective with the calendar year 2017 forms, due in 2018. This provision was stripped from the bill before enactment. Another bill (SB 28) that would change the deadline to January 31 passed the Senate on February 2, 2017, but has since stalled in the House. Document ID: 2017-0949 |
