Assessment and Taxation - KFB 2017 Resolutions

Assessment and Taxation - KFB 2017 Resolutions

Death Taxes

AT-1

We oppose all forms of “death taxes.” Changes to an existing inheritance, succession, or estate tax system must not increase the overall impact that the death tax places on agricultural producers.

Property Classification and Use Value Appraisal

AT-2

The Kansas Constitution and proper implementing legislation provide for appraisal of agricultural land on the basis of its income producing capability. We support equitable procedures for determination of net income. Kansas law should continue to provide a mechanism for calculating the capitalization rate of net income and the ability for the Director of Property Valuation Division to add to the capitalization rate. We support a statutory minimum and maximum capitalization rate. We encourage the application of the cap rate for its legislatively intended purpose.

We support the legislature’s clear statutory statement that appraisal judgment and appraisal standards be incorporated throughout the data collection, analysis and establishment of agriculture land valuations. Local appraisers shall be allowed to adjust valuations in cases where factors have an unusual impact on net income.

We support adjustments in real property valuations for agricultural producers, because of their unique condition. The appraisal standards should take into consideration the obsolescence that occurs for farms and livestock and/or commodity specific structures. Such standards should conform to generally accepted appraisal procedures which are adaptable to mass appraisal and consistent with the definition of fair market value. Furthermore, crop insurance indemnity receipts, farm program payments, easement payments, and conservation payments should not be considered when determining use value appraisal.

The Division of Property Valuation, Kansas Department of Revenue, must ensure that data, formulas and resulting calculations for determining the use value of agricultural land are valid and reflective of agricultural production.

Use value appraisal, and its core components, including determination of net income, the capitalization rate and appraisal judgment must continue to be an integral part of the Kansas property tax system. The Department of Revenue is encouraged to properly utilize the system in order to assure equity and stability in valuation of agricultural land. We further support agricultural classification solely on the basis of use, regardless of ownership, supplemental uses, or potential future value.

We oppose the use of rents and/or stocking rates as the sole basis for determining agricultural income from pasture and rangeland. Soil classifications are an appropriate component for determining agricultural use value of these lands.

We support the continuation of the Secretary of Revenue’s Advisory Committee on Use Value Appraisal, as well as Kansas Farm Bureau’s active participation on the Committee.

We support the general intent of the limited classification amendment which is part of the Kansas Constitution.

We support the continuation of on-farm grain and hay facilities designated as "farm equipment" for tax purposes.

The type of financing arrangement should not impact whether property is exempt from taxation.

State and Local Governmental Budgeting, Spending and Taxation

AT-3

We support the creation of an equitable tax system that is not detrimental to production agriculture.

We support a tax, fee and revenue mix that does not increase the dependency on property tax. Reductions in Kansas personal income tax, or sales tax, should not increase reliance on property tax as a revenue source for state or local governments.

It is important to the citizens of Kansas that the state tax, fee and revenue mix not place Kansas at a competitive disadvantage with neighboring states.

All retirement pay should be subject to the income tax at a rate or rates uniformly applicable to all retirees.

The sales tax should not be imposed on services. The sales tax should be applied at the retail level. We oppose taxing inputs or raw agricultural products, whether by removal of sales tax exemptions or by the imposition of an excise tax, a value-added tax or a transaction tax.

Kansas should require out-of-state companies with Kansas nexus to collect and remit applicable sales or use taxes.

We firmly believe government spending should not rise faster than the increase in personal income for Kansas citizens and taxpayers.

Zero-based budgeting is essential to fiscal planning and should be required for all state agencies as well as all local units of government. When preparing budgets, projected expenditures should not exceed anticipated revenues. We support balanced budgets.

Fees generated by government agencies should not be transferred to the state general fund.

Kansas should have appropriate statutory and constitutional provisions to assure:

1. Limitations on State General Fund appropriations;

2. Establishment of a state reserve fund for emergencies;

3. Taxation and expenditure limitations on local units of government, including Unified School Districts; and

4. A prohibition on the imposition of unfunded state mandates on local units of government.

We support spending limitations on state and local governmental units, including public building commissions.

The legislature should provide written notice at least five working days prior to any hearing on proposed legislation regarding redistribution or a loss of property valuation from one taxing district to another.

Tax Exemptions and Credits

AT- 4

Kansas has appropriately created justifiable tax exemptions for agriculture, business, industry and many not-for-profit groups. This has been done to assist economic development and provide for competitiveness with our neighboring states. Existing exemptions should remain in place. Goats should be classified as an agricultural livestock species and afforded the same tax exempt status as other major livestock species in the state.

The ingredient or component part exemption should be maintained for the sound practice of economic development and for the assistance of manufacturing, business, industry and agriculture in this state.

All citizens are consumers of food and are uniformly taxed on the food they purchase. We oppose legislation to totally exempt food from the state sales tax.

Taxation of Foreign Investments in Agricultural Resources

AT-5

Federal and state tax laws, and provisions of treaties, to which the United States is a party, should assure uniform tax treatment of those owning agricultural land. We are opposed to preferential tax treatment for non-U.S. citizens who lease, rent or have in any manner invested in our agricultural resources.

Water Severance Tax

AT-6

We oppose the creation of any water severance tax other than assessments on water usage by a Groundwater Management District. Taxing the extensive water requirements for irrigation and livestock would burden agriculture by providing most of these new tax revenues.

Regulatory programs concerning water pollution benefit all Kansans and should be funded from taxes collected statewide.