2021 brought a number of small business legislative victories
The 2021 legislative session brought a number of small business victories. Small business owners should feel confident that their voices were heard during this year. Thank you for your engagement and sharing your stories. This was the key for NIFB to help get bills passed in Topeka that will help your small business in the long run. Here are the highlights from Kansas’ 2021 session:
- Property Taxes – NFIB fought for and won legislation enacting a property tax lid. Skyrocketing property taxes in Kansas have hurt small business owners. The legislature sent to the Governor SB13, which enacts greater transparency and accountability requirements on local governments. Governor Kelly signed the bill, which is known as the Property Tax Truth in Taxation Law, into law. The new law requires a local governing body to notify the public of its intent to collect new property tax revenues above the previous year. The governing body must complete the “truth in taxation” hearing process and hold a public vote on the tax increase.
- Income Taxes – The legislature passed SB50, and subsequently overrode the Governor’s veto of the bill, which among other things, decouples the state tax code from changes made to the federal code in the historic federal Tax Cuts and Jobs Act. The new law makes several positive changes for small business owners:
- Exempting Unemployment Insurance fraud victims from state income tax on UI benefits fraudulently collected using their personal information.
- Allowing individual income taxpayers to itemize on state returns when taking federal standard deductions.
- Increasing state standard deductions by $500 to $3,500 for single filers, $6,000 for single head of household, and $8,000 for married filers filing jointly.
- Reinstating the Small business expensing deduction (SB 196 from 2020).
- Adjusting the Net Operating Loss Carryforward to match federal indefinite carryforward on losses.
- Sales Taxes – Passed HB2143 which increases, as of January 1, 2024, the threshold filing amounts for retailers to submit sales taxes to the Kansas Department of Revenue. The bill increases the threshold amount from $400 to $1,000 for annual filings and from $4,000 to $5,000 for quarterly filings. Retailers with annual liability exceeding $5,000 are required to file and remit sales tax on a monthly basis. The liability threshold for retailers required to pay the sales tax liability for the first 15 days of each month on the 25th day of that month is increased from $40,000 to $50,000.
- Business Protections – We fought for and won COVID-related business liability protections for small business owners. These measures prevent frivolous, virus-related lawsuits against small business owners during the pandemic. We successfully fought to extend these important protections which provide confidence and certainty to small business owners with the passage of SB283. The liability protections now run through March 31, 2022.
HR and Labor
- Unemployment Insurance – Fought for the passage of House Bill 2196 which makes comprehensive changes to the state’s unemployment insurance system. This bill became necessary in the wake of unprecedented number of fraudulent claims made during the COVID-19 pandemic. The makes these critical adjustments to law:
- Holding employers harmless for fraudulent charges on their accounts.
- Providing the trust fund up to $500 million in federal COVID-19 relief for the fraudulent claims paid from it.
- Requiring an increased focus on a reemployment plan between KDOL and Kansas Dept. of Commerce. Anyone receiving UI benefits for more than three weeks must request the individual’s resume, work history, skill list and job search plan, to share that information with Dept. of Commerce to match with employer openings.
- Requiring the KDOL secretary to develop procedures enabling employers to report when a UI claimant refuses to return to work if the offer is suitable and comparable to the claimant’s recent employment.
- Raising the minimum threshold for receiving a maximum of 20 weeks of UI benefits from a three-month seasonally adjusted average unemployment rate of 4.5% to 5.0%.
- Establishing a modernization council whose responsibilities include recommending changes to the UI computer system and conducting an audit to determine amount of fraud during the pandemic. Establishing new solvency rate tables which ensure UI tax contributions increase equitably among all employers in times when the trust fund needs replenished.
- Minimum Wage – Successfully stopped bills that would increase the state minimum wage to $15/hour. Small business owners know that more than doubling the state minimum wage will lead to increased labor costs and tough choices. They must either increase the cost of their product or service – which in many cases is not feasible – or reduce labor costs elsewhere. The reduction in labor costs would be achieved through reduced jobs, reduced hours, or reduced benefits. None of these changes benefit employees.
- Paid Leave, Prevailing Wage – NFIB fought for and won prohibitions on local municipalities from adopting ordinances requiring paid leave, predictive scheduling and prevailing wage requirements. We successfully stopped bills and continued efforts to undo these victories. We will remain diligent in fighting to preserve these prohibitions which help Kansas small business owners compete and survive.
- Small Business Lending Program – We supported and helped win passage of a new program that will provide low interest loans to small business owners. Senate Bill 15 created the Kansas Economic Recovery Loan Program. In the wake of the pandemic, it became clear that small business owners needed additional low cost financial programs to help them survive and emerge from the crushing effects of COVID-19. This new law allows for eligible lending institutions to use idle state cash for low interest loans, up to $250,000, to businesses with not more than 200 employees.
- Choice – We won passage of Senate Bill 24, which prohibits a municipality from taking any action that would limit a customer’s use of a service from a public utility based upon the source of the energy to be delivered to the customer. SB24 would provide certainty to most small business owners who list energy costs as some of their top concerns.