The Kansas Department of Revenue reported tax revenue in the month of December exceeded projections and added to the cash cushion available to the 2022 Legislature and Gov. Laura Kelly. (Sherman Smith/Kansas Reflector)
TOPEKA — Supercharged revenue collections in December by the state Department of Revenue exceeded the monthly estimate by $64 million to expand the cash cushion available for tax reductions or spending investments by the 2022 Legislature and Gov. Laura Kelly.
In the initial six months of the current fiscal year, the state treasury in Kansas deposited $4.28 billion from sources ranging from income and sales assessments to taxes on oil, tobacco and liquor. That has resulted in an unexpected mid-year addition of $83 million to the state treasury beyond the bullish estimate most recently updated in November.
Kelly has recommended lawmakers use the reserves to eliminate the state sales tax on groceries at an annual cost of at least $400 million to the state. She also proposed a one-time, $445 million tax rebate delivering $250 each to about 1.2 million Kansans.
“Over the past three years my administration has taken steps to restore the Kansas economy, and that fiscal responsibility has paved the way to provide direct tax relief to Kansas taxpayers,” said Kelly, a Democrat seeking re-election in November.
House and Senate GOP leaders indicated they were interested in considering bills featuring broad tax rate reductions.
The Department of Labor reported total tax collections in December were $890 million. That was 7.8% higher than projected for the month by economists and state officials on the Consensus Estimating Group. The state’s December tally was $120 million or 15% greater than collections in December 2020.
The three largest categories of state tax revenue exceeded expectations in December. In terms of individual income taxes, the state took in $355 million, which was $35 million more than anticipated for the month. Corporate income tax payments tallied $132 million for the month, $22 million above the projection. Sales tax revenue to the state reached $224 million last month to climb $4 million over the prediction.
The revenue department documented a 23% surge in cigarette tax collections of $10 million in December. Liquor taxes met expectations of $10 million. The severance tax on oil and gas generated nearly $6 million in revenue — about $1 million more than projected for the month.
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