The House Taxation Committee last week decided to freeze classification changes by county appraisers for two years while the dispute between Montgomery County and a nitrogen fertilizer company can be studied.
The dispute started after the Kansas Court of Tax Appeals upheld the appraiser’s valuation and classification changes. The appraiser said trade fixtures were part of the company’s real property and are not machinery and equipment. Machinery and equipment acquired after 2006 is exempt from property tax in Kansas.
Montgomery County Commissioners say not allowing the court decision to stand will result in large property tax increases. Businesses contend the legislature must clarify the dispute in favor of the refinery or big tax hikes will occur on many businesses. The House Taxation Committee thought more study was needed and passed the delay.
The suspension is contained in House Substitute for Senate bill 59. Property treated as personal property (machinery and equipment) as of July 1, 2006 could not be reclassified. There are also provisions for previously exempted property, stating that its status is also frozen.
Income tax debate possible Wednesday
The Kansas Senate this morning “agreed to disagree” on the proposed income tax cut bill (Senate Substitute for House bill 2117). It’s a necessary part of the process to advance debate because not all legislators on the tax conference committee have agreed to the bill. The House is expected to take up the “agree to disagree” this afternoon when it convenes at 4 p.m.
Legislators familiar with the issue believe that will set the stage for a debate on the measure as early as Wednesday.
Talk in the Statehouse hallways is that the House will not take up a budget until the Senate acts on income tax cuts because House members want to know how much money is available for the budget before discussing it.