[May 30, 2019] House Bill 2033, which passed both the House and the Senate in Kansas, would have established economic nexus in the state, and would have required marketplace providers to collect tax on behalf of marketplace sellers.
The current trend is for states to impose these sorts of requirements; many states have passed bills over the past few months establishing economic nexus and requiring marketplace facilitators to collect tax on behalf of marketplace sellers. The bill would also have introduced a mechanism for lowering the tax rate on food provided certain budgetary needs were met by increased revenue gained through remote sellers and marketplace providers; lowering or eliminating the tax rate on food has long been a popular notion in the state.
However, the Governor vetoed the bill, suggesting that it was a: “rushed attempt to achieve an immediate political victory.” The bill was returned to the House, where there was a motion to override the veto. The veto was sustained, as it failed to garner the 84 required votes. Given the long-time economic struggle in the state, and repeated attempts to implement a reduction or elimination of the tax on food, the most likely reason for the veto is the inclusion of the provisions related to the food tax rate.
Regardless, however, Kansas has bucked the national trend.
