Kansas Governor Vetoes Bill Restructuring Income Tax

Gov. Laura Kelly of Kansas on Wednesday vetoed a version of state House Bill 2036, a state income tax restructuring bill.

The Senate substitute version of House Bill 2036 would have exempted Social Security benefits from state income taxes; increased the standard deduction and personal exemption amounts; reduced the number of individual income tax brackets to two, from three, and reduced the individual income tax rates; and made other tax rule changes.

Kelley also vetoed state House Bill 2098, which would have created a motor vehicle sales tax transaction exemption and other state sales tax exemptions.

Those two bills and a third bill that Kelly vetoed, the House substitute for the Senate Bill 96 child care center regulation bill, would have cost the state $520 million in revenue per year, Kelly said in a veto announcement.

What it means: Clients in Kansas who were counting on getting state income tax breaks might not necessarily get those breaks.

The thinking: Kelly wants lawmakers to pass an alternative tax change package that she has proposed. She predicted that her package would reduce state revenue by just $433 million per year.