March 7, 2019 9:15am
What you need to know about tax reform legislation in #KYGA19
A tax-reform “clean-up” bill that has been making its way through the legislature over the past few weeks has been sent to a conference committee made up of House and Senate leadership from both sides of the aisle in the General Assembly. Committee members are charged with hashing out the differences between the versions of the bill passed by each chamber. They also, however, have wide latitude to make much more sweeping changes that go beyond the current scope of the bill, if they so choose.
House Bill 354 was introduced in mid-February by House Appropriations & Revenue Chairman Steven Rudy. At more than 100 pages, the bill covers a wide range of different tax issues and has often been described as a “clean-up” bill, largely intended to address unintended consequences from last year’s tax reform package.
A key sticking point between the version that passed the House on February 21 and the one that passed the Senate on March 4 is how to treat sales made by nonprofits such as charitable, religious, and educational organizations when it comes to the state sales tax. While both versions of the bill relieve nonprofits from having to collect and remit state sales taxes on admissions to their events, they differ on other sales. The House version, for example, would allow nonprofits to not collect and remit sales taxes on the first $10,000 of fundraising sales. The Senate version, on the other hand, removed this threshold, effectively freeing nonprofits from collecting and remitting sales taxes on all fundraising sales (though with some exceptions). GLI supports the Senate’s approach on this specific issue.
The bill also touches on a number of tax incentive programs, manufacturing-related issues, and rules for collecting online sales taxes, among several other topics.
The committee will have roughly a week to hammer out the differences between the two versions in order to pass it through both chambers by the end of business on March 14. The ten day veto recess begins on the 15th, followed by sine die on March 28.
Numerous other concepts and proposals could end up making their way into the bill that emerges from the conference committee. Senate President Stivers, for instance, has stressed the importance of reforming how Kentucky taxes banks – an issue that GLI fully agrees is in much need of attention.
GLI will be monitoring the conference committee closely and providing input. We strongly encourage GLI investors to send us their feedback and thoughts on the bill as soon as possible.
Members of the conference committee include several legislators from the Louisville Metropolitan Caucus. A full list is provided below with the names of LMC members in bold.
Conference Committee Members
President Robert Stivers (R)
Senator Damon Thayer (R)
Chairman Chris McDaniel (R)
Senator David Givens (R)
Senator Stan Humphries (R)
Senator Mike Wilson (R)
Senator Julie Raque Adams (R)
Senator Morgan McGarvey (D)
Senator Johnny Ray Turner (D)
Senator Dennis Parrett (D)
Speaker David Osborne (R)
Representative David Meade (R)
Chairman Steven Rudy (R)
Representative Bam Carney (R)
Representative Chad McCoy (R)
Representative Suzanne Miles (R)
Representative Phillip Pratt (R)
Representative Rocky Adkins (D)
Representative Derrick Graham (D)
Representative Joni Jenkins (D)