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Kansas Self-Storage Operators Could Lose Sales-Tax Exemption

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The Kansas legislature is considering a bill that would remove the sales-tax exemption from self-storage and several other services. The house approved the measure 78-42 on Monday, sending it to the senate. The proposal is part of a larger budget strategy to help offset a proposed 1 percent sales tax reduction on food that would occur in 2020, according to a source. The house passed the food-tax measure 117-3.

Other businesses affected by the bill are collection agencies; detective services; non-residential cleaning services, including commercial plumbing; pet daycare; private security guards and security systems; and towing. Kansas sales tax is 6.5 percent.

The measure is being generally supported by Republicans but has received pushback from Democrats and some moderate Republicans, a source reported. Those opposed to the bill have argued the services included will largely affect the poor. Rep. Patsy Terrell noted home renters would be affected by the inclusion of self-storage.

The state would generate about $60 million per year over the next two years by repealing the sales-tax exemptions, which is nearly equal to the amount that would be lost by lowering the sales tax on food to 5.5 percent, according to a source. The two strategies were initially part of the same bill proposed by Rep. Kristey Williams but were separated for an earlier house vote.

House representatives also removed gym memberships at non-profit and government-owned centers from the original list of services targeted for the exemption repeal. Sales-tax exemptions in Kansas amount to about $6 billion, according to the state.

Sources:

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