Bills Introduced to End the State Sales Tax on Food: Understanding the Differences
KAC is in favor of a fiscally responsible, straightforward bill that would eliminate or reduce the state sales tax on food. Putting this money back into the pockets of families will have a considerable impact, benefitting every single Kansas resident. We have gathered hundreds of signatures from organizations and individuals across the state showing broad bipartisan support for such a policy.
During the first week of the 2022 legislative session, four bills dealing with eliminating the state food sales tax were introduced. There are two Senate bills - SB 339 and SB 342 – and two House bills – HB 2484 and HB 2487. KAC is appreciative to see introduction of these bills early in the 2022 session, and we are eager to see the bills move through the legislative process.
On Thursday, February 10, the Senate Committee on Assessment and Taxation amended SB 339 and voted for it to be sent to the full Senate. The amendments (provisions from SB 359, SB 327, and SB 228) combined with the bill are briefly detailed below.
Recently, two bills were introduced that would reduce or eliminate the state food sales tax: HB 2711 and HB 2720. Both will have hearings in the House Tax Committee on March 2, 2022.
On Tuesday, March 16, the House Taxation Committee amended the bill to make minor changes to the definition of food and increase the percentage of funds the State Highway Fund retains.
The below chart highlights the differences between the four original bills as well as the two bills recently introduced.
| Senate Bills | House Bills | |||||
|---|---|---|---|---|---|---|
| SB 339 (as amended by Senate Tax) |
SB 342 | HB 2484 | HB 2487 | HB 2711 | HB 2720 | |
| Where is the bill now? | Voted out of committee; awaiting debate in Senate chamber | Bill heard in committee | Bill heard in committee | Bill heard in committee | Voted out of committee; awaiting debate in House chamber | Bill heard in committee |
| Retail sales and compensation use tax rate | 6.5% (no change) |
6.5% (no change) |
6.5% (no change) |
6.5% (no change) |
6.3% | 6.5% (no change) |
| State sales tax rate on food and food ingredients (excluding prepared foods) | 0% | 0% | 0% | 0% | 3.5% - 0% gradual decrease if Budget Stabilization Fund is $100M or greater by the start of the fiscal year | 0% on foods included in the SNAP definition of "food" |
| State sales tax rate on prepared foods | 0% | 6.5% (no change) |
0% | 6.5% (no change) |
6.5% (no change) |
6.5% (no change) |
| Farmers’ markets - farm product sales explicitly exempted from state and local taxes | No | Yes | No | Yes | No | No |
| Increasing the rate of sales tax revenue the State Highway Fund retains | 16.154% (no change) |
18.222% | 16.154% (no change) |
18.222% | 18.000% | 16.154% (no change) |
| Expanding use of 0% state rate for sales tax for certain utilities | Yes | No | No | No | No | No |
| Explicitly allowing local governments to eliminate their local sales tax on food | Yes | No | No | No | No | No |
| Excluding certain delivery charges from sales tax | Yes | No | No | No | No | No |
| Allowing movie theaters to retain state sales tax collected on ticket/concession purchases from July 1, 2021, to July 1, 2023 | Yes | No | No | No | No | No |
| Effective date | January 1, 2024 | July 1, 2022 | January 1, 2023 | July 1, 2022 |
Begin gradual decrease |
August 1, 2022 |
| Annual fiscal impact | $864M | $480M - $490M | $770M - $785M | $480M - $490M | $438M - $658M | $402M - $521M |
*A fiscal note for this bill from the Division of the Budget has not yet been released.
[Post updated March 16, 2022]
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