Not legal? Not a problem for Kansas Governor Laura Kelly.
The Kansas Democrat recently championed an internet sales tax based on old legislation that does not comply with the parameters of the Supreme Court’s decision in Wayfair v. South Dakota.
As one might expect, Derek Schmidt, the Attorney General of Kansas, insists that the Kelly administration does not have the authority to unilaterally raise taxes in such a manner.
While GOP legislators called for a halt to the implementation of the plan, “the (revenue) department’s top administrator, Secretary Mark Burghart, a veteran tax attorney himself, said in a statement that the department is obligated to follow its current course unless told otherwise by the courts.”
So the Governor is now pushing an unconstitutional policy, and one that her state’s own Attorney General says she does not have the authority to implement.
Americans for Tax Reform is beyond concerned with Kansas’ aggressive new internet sales tax. The controversial new policy requires that all online retailers remit sales tax in the state of Kansas, with no sales or transaction thresholds – meaning tiny individual operations are obligated to collect.
Historically, Kansas has been stridently pro-business and anti-tax. However, this new policy is one of the most aggressive taxes in the country and will have substantial ramifications for both businesses and taxpayers in Kansas.
Adding to the confusion, Governor Kelly vetoed multiple bills to reform the Kansas tax code, and impose an internet sales tax. Yet, Kelly was not happy because these bills cut taxes overall, in order to make up for the new burden created by the internet sales tax.
The new tax has the potential to substantially erode the economy of Kansas. By failing to provide even modest protections for small businesses in her hyper-aggressive new tax, Kelly’s tax policy is likely to drive away out of state businesses selling to Kansas residents. The new tax also has the potential to open a floodgate of compliance issues that will plague the businesses which remain operational.
Add to that, the serious questions about its constitutionality. When the Supreme Court issued its ruling last year in Wayfair Vs. South Dakota, it “outlined a series of requirements that the court felt made the law acceptable” including “a minimum sales or transaction threshold, specifically preventing states from going after small businesses and sellers doing very little business in a state.” Because the Kansas law has no such threshold, it should be unconstitutional.
This situation is a major test for the Wayfair decision. Every American is at risk if a state’s Governor can bulldoze right over the Supreme Court’s limits on interstate taxation and start grabbing money from out-of-state residents who cannot vote them out.
The stakes are sky-high for all taxpayers, and ATR continues to encourage Kansas legislators to fight against the Governor’s power-grab.