Three Republican Kansas senators say the state should overhaul a policy that lets thousands of business owners avoid paying income taxes. Under current law, owners of more than 300,000 businesses don’t have to pay any state income taxes. Senate Vice President Jeff King says that was not their intention when lawmakers passed the tax cut. He says they only meant to exempt working capital from income taxes, not the wages a business owner takes home.
“Unfortunately, the act was interpreted to exempt all business income from income tax. That isn’t fair, that isn’t what was intended. It’s about time we fix it,” says King.
King says reinstating income taxes on business owner wages would also help the state manage a budget shortfall. Governor Sam Brownback has threatened to veto changes to the business tax policy in the past. His administration says the exemption is helping grow business in Kansas.