Pub. 8 2019 Issue 4

l e a d i n g a d v o c a t e f o r t h e b a n k i n g i n d u s t r y i n k a n s a s 26 THE FIGHT FOR TAX EQUITY BEGINS – LEGISLATIVE LEADERS APPROVE INTERIM HEARING R ecently, there was an article written by a college student who was making the case that millennials should be choosing credit unions over commercial banks hand over fist – saying that they would be if they only knew the real difference between the two. After we suppressed the urge to fire off a scathing retort to this 20-something, we realized that he was right about one thing … people need to be educated about the difference. That is, if people really understood the true difference between credit unions (and Farm Credit for that matter) and commercial banks – they would be surprised to learn that they as individuals pay more income tax than credit unions do, and that they are being penalized for doing business with income- tax-paying financial institutions. And that’s exactly what we all must do if we are ever going to achieve tax equality. We must let legislators and customers alike know how the tax inequality is affecting their lives – their ability to obtain financial services at a competitive price and to keep a tax-paying bank in their community. As many of you know, late in the session at the direction of the KBA State Affairs Committee, along with approval from the KBA Board of Directors, KBA introduced two pieces of legislation to start the discussion about tax policy in Kansas when it comes to financial institutions that compete amongst themselves on a daily basis. The first bill (SB 238) would remove the Kansas privilege tax on interest income earned from business loans for all banks and savings and loan associations operating in Kansas. “Business” is defined to include all commercial and agricultural transactions. The second bill (SB 239) would impose the Kansas privilege tax on interest income earned from business loans for state-chartered credit unions with total assets of $100,000,000 or greater. Our state policy makers should not be choosing winners and losers with tax policy decisions. They need to ensure all Kansans, regardless of whom they choose for their financial service needs, are treated equitably. SB 238 and SB 239 are two approaches that provide tax equity for all Kansans. On July 1, the Legislative Coordinating Council, a committee comprising or: consisting of legislative leadership from both sides of the political aisle and with both House and Senate members, approved an interim committee hearing this fall. This will give KBA legislative staff time to fully research the topic and have good data to present – as well as give legislators more time to fully vet the topic and hear both sides make their case. The interim committee will be chaired by Senator Rob Olson (R-Olathe), and his Vice Chair will be Representative Jim Kelly (R-Independence). The rest of the committee is listed below: • Senator Rick Billinger (R-Goodland) • Senator Bruce Givens (R-El Dorado) • Senator Eric Rucker (R-Topeka) • Senator Mary Ware (D-Wichita) • Representative Tom Cox (R-Shawnee) • Representative Leo Delperdang (R-Wichita) • Represenatative Jene Vickrey (R-Louisburg) • Representative Cindy Neighbor (D-Shawnee) • Representative Elizabeth Bishop (D-Wichita) By Kathy Taylor EVP - General Counsel; Alex Orel, SVP - Government Relations