I love getting to share good news.
It is a rare opportunity that I get to do that with political issues.
But I have had several calls and visits to my office asking me to investigate the constitutional amendment that will be on Kansas ballots this year.
The amendment takes up most of a page and language about how taxes are levied is confusing unless you are a good tax attorney.
The best news I have to offer came from Ty Masterson who assured me that the change was simple and beneficial. It is only two words.
"The only changes are in italics," Masterson pointed out. "By law, we have to publish the rest of the language that will be included in that part of the constitution, but unless it is in italics, it is existing language."
That is especially important to farmers who read the paragraph numbered (2).
This language says that taxes would be valued on the basis of its agricultural productivity or agricultural income.
Even though the language is ominous, unless you dislike the current system, there is no need to worry. Any taxes charged under that paragraph are already built into your business plan.
The only change proposed in the amendment is how taxes will be figured on watercraft.
If approved, boats would be separated from other personal property and could be charged at a different rate.
This isn't a new idea from a Kansas legislator. Oklahoma, Missouri and Nebraska already have a similar plan in place.
Because of that, The Kansas Department of Wildlife Parks, and Tourism says that Kansas is losing money because people are licensing their boats in other states – even though the practice is illegal.
"To lower their property tax burden, some owners unlawfully register their vessels in neighboring states. The only way county appraisers know if a resident owns a watercraft is for the owner to declare it for property tax purposes or through watercraft registration records provided by KDWPT," according to a press release from KDWPT. "When owners go out of state to register their boats and avoid paying property taxes, the state loses registration revenue and the counties lose property tax revenue. An estimated 10,000 Kansas residents register their boats in other states to avoid paying higher property taxes in Kansas. There are about 85,000 watercraft registered with KDWPT." So even though the rate charged to boat owners may decrease, the amount of revenue brought in by the change should yield higher returns because thousands of Kansans will have the incentive to legally register their watercraft in their home state.
Beyond the obvious taxing revenue, the state is also losing out on another revenue stream because of the deceptively low number of boats registered here.
Page 2 of 3 - According to the KDWPT, "(We) use registration revenues along with matching federal funds – the amount of which is determined by the number of registered watercraft – to support boating-related programs such as: developing, improving, and maintaining docks, boat ramps, toilet facilities; inspecting marinas; enforcing vessel operation, sanitation, sound muffling and boating under the influence laws; investigating boating accidents and marine thefts; officer training; search and rescue operations; administering boating education and water safety programs; publishing boating information; and appearing at fairs and boat shows."
This amendment seems confusing. But when you get past all of the legal language, it is just an attempt to regain lost boating registrations and taxes.
A "yes" vote will change the way taxes are assessed on boats and help accomplish that goal. A "no" vote keeps things the way they are.
Confusing? Maybe. Controversial? Not really.
I see no reason not to vote yes and try to bring that revenue back to Kansas.
Kent Bush is the Augusta Gazette Publisher. He can be contacted at firstname.lastname@example.org.
The language that would change is in bold type.
Explanatory statement. This amendment would allow the legislature to classify and tax watercraft upon a basis different from other property.
A vote for this proposition would permit the legislature to provide for separate classification and taxation of watercraft or to exempt such property from property taxation and impose taxes in lieu thereof.
A vote against this proposition would continue the taxation of watercraft in the same manner as all other property.
Shall the following be adopted?
§ 1. System of taxation; classification; exemption.
(a) The provisions of this subsection shall govern the assessment and taxation of property on and after January 1, 1993 2013, and each year thereafter. Except as otherwise hereinafter specifically provided, the legislature shall provide for a uniform and equal basis of valuation and rate of taxation of all property subject to taxation. The legislature may provide for the classification and the taxation uniformly as to class of recreational vehicles and watercraft, as defined by the legislature, or may exempt such class from property taxation and impose taxes upon another basis in lieu thereof. The provisions of this subsection shall not be applicable to the taxation of motor vehicles, except as otherwise hereinafter specifically provided, mineral products, money, mortgages, notes and other evidence of debt and grain. Property shall be classified into the following classes for the purpose of assessment and assessed at the percentage of value prescribed therefor:
Class 1 shall consist of real property.
Real property shall be further classified into seven subclasses. Such property shall be defined by law for the purpose of subclassification and assessed uniformly as to subclass at the following percentages of value:
Page 3 of 3 - (1) Real property used for residential purposes including multi-famil residential real property and real property necessary to accommodate a residential community of mobile or manufactured homes including the real property upon which such homes are located....11 1/2%
(2)Land devoted to agricultural use which shall be valued upon the basis of its agricultural income or agricultural productivity pursuant to section 12 of article 11 of the constitution..........30%
(3) Vacant lots..........12%
(4) Real property which is owned and operated by a not-for-profit organization not subject to federal income taxation pursuant to section 501 of the federal internal revenue code, and which is included in the subclass by law ..........12%
(5) Public utility real property, except railroad real property which shall be assessed at the average rate that all other commercial and industrial property is assessed ..........33%
(6) Real property used for commercial and industrial purposes and buildings and other improvements located upon land devoted to agricultural use ..........25%
(7) All other urban and rural real property not otherwise specifically subclassified..........30%
Class 2 shall consist of tangible personal property. Such tangible personal property shall be further classified into six subclasses, shall be defined by law for the purpose of subclassification and assessed uniformly as to subclass at the following percentages of value:
(1) Mobile homes used for residential purposes ..........11 1/2%
(2) Mineral leasehold interests except oil leasehold interests the average daily production from which is five barrels or less, and natural gas leasehold interests the average daily production from which is 100 mcf or less, which shall be assessed at 25%..........30%
(3) Public utility tangible personal property including inventories thereof, except railroad personal property including inventories thereof, which shall be assessed at the average rate all other commercial and industrial property is assessed..........33%
(4) All categories of motor vehicles not defined and specifically valued and taxed pursuant to law enacted prior to January 1, 1985..........30%
(5) Commercial and industrial machinery and equipment which, if its economic life is seven years or more, shall be valued at its retail cost when new less seven-year straight-line depreciation, or which, if its economic life is less than seven years, shall be valued at its retail cost when new less straight-line depreciation over its economic life, except that, the value so obtained for such property, notwithstanding its economic life and as long as such property is being used, shall not be less than 20% of the retail cost when new of such property ..........25%
(6) All other tangible personal property not otherwise specifically classified..........30%
(b) All property used exclusively for state, county, municipal, literary, educational, scientific, religious, benevolent and charitable purposes, farm machinery and equipment, merchants' and manufacturers' inventories, other than public utility inventories included in subclass (3) of class 2, livestock, and all household goods and personal effects not used for the production of income, shall be exempted from property taxation.