Governor proposes plan to tax Amazon, Etsy
TOPEKA, Kan. (WIBW) - Kansas Governor Laura Kelly announced a plan Tuesday that she said would level the playing field for small local businesses, while also spurring COVID-19 economic recovery in the state.
Kelly said it is time to tax goods sold by “marketplace facilitators” like Amazon, Etsy and others. Noting that Kansas is one of only three states to not yet do so, she said the state is essentially allowing them to dodge taxes. Kelly said that it is not fair to the local clothing store and bookstore on Main Street, Kansas.
Gov. Kelly said the new bill would generate around $97 million in additional revenue for the state, and give 94% of Kansans a tax cut, all with a neutral and balanced state budget.
The governor insists that her proposal is revenue neutral--stating that Kansans “can’t afford more bad tax policies that undercut our recovery and are not sustainable over time.”
“COVID-19 has brought unprecedented challenges for hard-working Kansans, their families, and their businesses,” Governor Laura Kelly said. “We know they need relief - and they need it as soon as possible. Our proposal is an amendment to Senate Bill 22, that will provide tax relief to the vast majority of Kansas families and assist in our state’s economic recovery from the COVID-19 pandemic.”
According to the Kansas Governor, all remote sellers through marketplace platforms like Amazon or Etsy, have been instructed to register and collect tax on property that is shipped to the state. She said the new plan would make the marketplace facilitator responsible for collecting and remitting the tax on behalf of the remote sellers on their platforms. This would also allow the state to collect from fewer entities and increase compliance. She said Kansas is one of only three states that has not created this provision.
Gov. Kelly said the new plan also imposes a tax on digital products like streaming services.
“When out-of-state retailers can duck taxes, there is no way for the local clothing store up the street or the local book store to try and compete with out of state prices,” Governor Kelly said. “By requiring marketplace facilitators to collect use tax on out-of-state products, we level the playing field for Kansas main street businesses.”
Kelly blasted Senate Bill 22, saying that “it would be bad enough to introduce this bill in a normal year” and “it is unthinkable that legislative leadership during a health and economic crisis, the like that we haven’t seen in a hundred years...that they would even consider such action.”
“At a time when we’re facing huge unemployment rates and an unsteady economy, we do not need tax cuts for the rich which have no impact on unemployment,” Senate Democratic Leader Dinah Sykes said. “At a time when we’re facing economic uncertainty, we do not need to repeat failed tax experiments which studies have shown – and which we have seen firsthand here in Kansas – have no impact on economic growth. Senate Democrats are proposing solutions that will grow our economy, keep Kansas businesses competitive, and keep more money in the pockets of Kansas families.”
The governor claims that her proposal would generate $97 million annually in additional revenue for the state. She says that it would increase standard itemized deduction allowable on Kansas tax returns by 20% in 2021 and 35% in 2022 and beyond. According to Kelly, 94% of Kansas tax-payers will see a decrease in taxes.
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