TOPEKA — The House Tax Committee stampeded to approval of a bill Monday creating a statewide sales tax exemption for purchases of supplies to replace hundreds of miles of fencing destroyed last week in the largest wildfire to recorded Kansas history.
The fast-track legislation, expected to be considered by the full House today, was narrowed by the committee to remove a sales tax exemption for materials bought to replace rural electric cooperative utility poles and for materials to rebuild residential structures.
“Let’s make this a clean bill that the Senate can expedite as well,” said Rep. Ken Rahjes, R-Agra.
House Bill 2387 was broadened by the House panel to allow claims from the fires of 2017 as well as large grass fires occurring in 2016. A state law authorizing sales-tax benefits for fencing tied to last year’s fires expired Jan. 1.
The new bill would enable ranchers and farmers to submit tax claims from this year’s fires in 2017 or 2018. The legislation would allow point-of-sale application of the retail sales tax exemption as well as issuance of rebates through the state on prior fencing material transactions.
Rep. Ken Corbet, R-Topeka, said granting farmers extra time to deal with paperwork on the exemption was appropriate because it would take months of hard work to install new fencing and bring ranching operations back online.
“People affected may not even have income this year,” Corbet said.
The Kansas Department of Revenue would be responsible for issuing documents certifying eligibility for the tax exemption.
The Department of Revenue estimated the amount of foregone state tax revenue — if limited to claims on the latest fires in 2017 — would be approximately $4.6 million.
Rich Felts, president of Kansas Farm Bureau, said the cost of replacing prairie fence could exceed $10,000 per mile. The Legislature has extended sales tax exemption to support restoration of fences destroyed by fires, he said.
A huge wildfire in 2016 that moved from Oklahoma into south-central Kansas scorched in excess of 400,000 acres. Last week, fires burning in 23 counties blackened more than 700,000 acres. Thousands of livestock were killed in the most recent natural disaster.
“Ranchers lost considerable amount of fence, livestock, forage resources and harvested feed,” said Mike Beam, representing the Kansas Livestock Association. “While homes and structures were likely covered by insurance, fence repairs and livestock losses are usually not.”