Kansas - Estate tax fate under debate: Options include elimination

By Tim Carpenter
The Capital-Journal

A Senate subcommittee Monday began planning a possible wake for the state's estate tax.
Among ideas considered by the Senate Assessment and Taxation Subcommittee would be the immediate demise of the death tax. That equates to a $52 million tax break for those inheriting wealth in Kansas.

Another alternative would be to mirror the federal government's planned phase out of the tax by 2010.

The third option, certain to be less popular with taxpayers, would be to pass a new law that retains the Kansas estate tax in a form that keeps the state from losing tax revenue.

Members of the subcommittee didn't pick a favorite, preferring to await information about financial implications of each alternative and the status of other tax-cut bills at play in the Statehouse.

"We can't make the right decision before we have the right information," said Sen. Terry Bruce, R-Hutchinson, subcommittee chairman.

The four-senator panel was put together to study two bills: Senate Bill 356, which repeals the Kansas estate tax, and Senate Bill 365, a measure that reshapes the state's estate tax.

One member of the subcommittee, Sen. Roger Pine, R-Lawrence, said it would be nice to dump the estate tax, as well as business taxes on franchises and on machinery and equipment.
"If I was a taxpayer out there, I'd like to get rid of all of them," Pine said.

Allie Devine, a lobbyist with the Kansas Livestock Association, offered an amendment to Senate Bill 365 that would help farms and ranches pass from one generation to the next. Changes recommended by KLA would trim the state tax on a $2 million estate to $65,000 from the current $99,000.

"Don't take their assets away from them when they're trying to continue their operations," she said.

The KLA also suggested the state estate tax be eliminated in 2010.