TOPEKA (AP) – A lobbyist for the Kansas Bankers Association is telling legislators that bank stockholders are paying $2.5 million more a year in taxes because of a law passed last year to eliminate income taxes for thousands of business owners.
Lobbyist Douglas Wareham on Tuesday urged the Senate Assessment and Taxation Committee to correct what he sees as an unintentional flaw in the law.
The law exempted the owners of 191,000 businesses from income taxes. But banking companies pay what’s known as the privilege tax, a special income tax applied only to financial institutions.
Wareham said when legislators exempted other business owners from income taxes, they also eliminated deductions that the business owners used to claim. The changes wiped out a deduction that bank shareholders could claim for their companies’ losses.