Kansas back-to-school sales tax holiday is likely, but how do you define school supplies?

Republican and Democratic lawmakers are backing the idea of creating a back-to-school sales tax holiday, but the definition of school supplies could become a sticking point as legislation is crafted.

"I want to give Kansas children, their families, what they need," said Sen. Oletha Faust-Goudeau, D-Wichita. "The essential, necessary items that they need to be successful in their education and their future."

The Senate has three bills tackling the issue: SB 21, SB 29 and SB 55. The chamber's tax committee held hearings Thursday on all three bills and could start hammering out differences soon.

"I do look forward to working with all the senators on this. I think we'll get a good product," said Sen. Caryn Tyson, R-Parker, and chair of the Senate Assessment and Taxation Committee.

Meanwhile, Gov. Laura Kelly has been promoting her tax cut plan with two public appearances in Johnson County and one in Wichita. On Wednesday, Kelly appeared at Hillcrest Clothing Bank in Lenexa with an emphasis on the back-to-school tax holiday.

"For parents throughout the state, this will make preparing for back to school more affordable," Kelly said. "Shopping for school supplies can be tough. The supply list is long, the expenses add up. Kids always seem to outgrow their school clothes before you’ve cut the tags off."

More:Laura Kelly again pushes food sales tax cut. Can she convince entrenched Republicans?

Is clothing a back-to-school purchase?

Whether to include clothing — and how to define it — could be the most controversial aspect of the legislation.

Sen. Molly Baumgardner, R-Louisburg, was skeptical of the "interesting" clothing definition.

"I think we could probably throw out garters, garter belts, girdles, wedding apparel, and we could add some of these other things," Baumgardner said.

Sen. Virgil Peck, R-Havana and vice chair of the tax committee, noted that his bill eliminates some clothing items: "baby receiving blankets, diapers, wedding dress. I removed blackboard chalk and instead inserted whiteboards and whiteboard markers. I don't know how many schools still use blackboards, but maybe some."

"I don't know how many people are going to purchase a wedding dress getting ready to go back to school," he said. "No guy would — well, shouldn't — and hopefully we're not going to have young ladies getting married before they get out of school."

Baumgardner also noted that sewing equipment and supplies are not included.

"So we're saying that a parent can't choose to make clothing for their children and get the discount with that," she said. "And we're also saying that if a student is enrolled in home economics, they can't get that discount for those items they might need."

More:These tax cuts will be prioritized this legislative session as Kansas enjoys $2.3B surplus

Streamlined compliance mandates definitions

A key component is whether lawmakers want to stay in compliance with the Streamlined Sales and Use Tax Agreement. The interstate pact is designed to streamline tax compliance for businesses while boosting tax collections on sales involving a buyer in one state and a seller in another. The agreement involves standardized definitions to ease the burden on retailers.

But not everyone likes the definitions set by the group

Senate Minority Leader Dinah Sykes, D-Lenexa, said the clothing definition was based on complying with Streamlined, but suggested working with the Kansas Department of Revenue to address concerns.

A fiscal note indicates that Peck's bill could cause compliance issues.

Peck said he is willing to discuss ways to make the legislation compliant with Streamlined. He acknowledged that it "does benefit Kansas greatly," but he believes lawmakers "have some flexibilities ... because they want us in it probably worse than we want to be in."

"I have introduced back to school sales tax holidays, I never cared if they were Streamlined compliant in the the past, still don't really care that much," Peck said.

More:Designed to lessen burden of sales tax collection, interstate pact faces scrutiny in Kansas

Kansas lawmakers to decide finer details

Estimates of the final cost to state coffers — and savings to taxpayers — will depend on what passes. Lawmakers have several decisions to make.

The Faust-Goudeau bill, SB 21, is limited to school supplies, school instructional materials and school art supplies. The Peck bill, SB 29, adds clothing, clothing accessories or equipment, prewritten computer software, personal computers and school computer supplies. So does the Sykes bill, SB 55, which is also the governor's proposal.

The Faust-Goudeau bill has a $100 cap on individual items. The Sykes bill has $100 caps on most school supplies, with $300 caps on clothing and computer software, and a $2,000 cap on computers. Any item over the limit would receive no tax exemption.

The Peck bill has no limits, which a fiscal note indicates would substantially increase its cost.

The Faust-Goudeau bill is estimated to cost about $480,000 in its first year. The Peck bill is estimated to start at $9.3 million a year.

A fiscal note was not yet available on the Sykes bill, but the governor's office previously estimated her plan would amount to $5.5 million in sales tax relief.

Local sales taxes would also be affected, but projected amounts were not calculated.

The duration of the tax holiday is also up for debate. The Faust-Goudeau bill has a two-day period beginning the first Friday of August. Both the Peck and Sykes bills have a four-day period beginning the first Thursday of August. There was also division among advocates over whether the holiday should last more than one weekend.

The start date must also be decided. The Peck and Kelly bills implement the tax holiday in 2023. The Faust-Goudeau bill waits until 2024.

The proposals have no way to check whether purchases are for educational purposes, meaning anyone buying an exempt product during the tax holiday would receive the benefits.

Broad support for sales tax holiday

Education groups are supportive, with administrators and teachers unions backing the idea.

"This bill can help families," said Jim Karleskint, the United School Administrators of Kansas lobbyist and a retired superintendent of Holton USD 336. "This bill can help teachers and administrators. The main thing is it can help kids, and that's what is the biggest motivation for me to be in favor of it. It boosts our state's economy, it keeps money in Kansas."

Stacey Knoell, executive director of the Kansas African American Affairs Commission, is a former middle school math teacher.

"The student population that I served in inner city Kansas City, Kan., they didn't have the school supplies. It was unable available to them," Knoell said. "So I can speak from personal experience that I did go out to Walmart and buy as a math teacher, surprisingly enough, a lot of pencils to provide for my students. Also, I have two small children, not small now, but 12 and 14, and so I think this type of tax holiday would definitely help parents."

League of Kansas Municipalities lobbyist Spencer Duncan, who is also a Topeka City Council member, said the league is supporting a tax holiday after past opposition. While the group generally prefers lowering the base tax rate, they weighed that against the "greater good."

"We have changed that position," Duncan said. "We will always be concerned about too many exemptions over time create too much of a burden on the few paying for the many, and we obviously want an equitable tax base over time."

While the league opposes expanding the holiday to more than one weekend, Kansas Appleseed executive director Jami Reever expressed concern for people living paycheck to paycheck.

"What about those families whose paycheck doesn't fall on the right Friday of the tax holiday," she said. "Some will miss out on any of those tax savings."

Duncan was also one of many people who acknowledged that at least some Kansans leave the state for back-to-school shopping, particularly in Missouri, meaning Kansas businesses are losing out on commerce while local governments potentially lose some tax revenue.

The tax holiday in Missouri spans three days, starting the first Friday in August, with exemptions for school supplies, clothing, computers and other items.

"As a child, I loved back to school shopping, getting those new shoes and all of that," Sykes said. "Then as a mother, I think my children did not enjoy it quite as much as I did because they weren't at the pool with their friends. We did cross over the state line to Missouri to shop with a sea of red carts. My children had their checklist trying to find all the supplies."

"I have spent many dollars in Missouri on back-to-school items and computers," she said.

Tyson said recalled trying to create a tax holiday a decade ago when two colleagues from Johnson County "said they didn't know anybody that would cross the state line to save a few cents. I said, 'Oh, you're not going over and looking at the license plates.'"

Oklahoma also has a sales tax holiday, as do about 15 additional states, Peck said.

"Not only are our merchants losing sales of school supplies, clothing, computers, but we know when a family goes shopping, they're going to spend the day. They're going to go out to eat. They're going to buy fuel," Peck said. "That is items that are taxed that we are not receiving a state tax on."

Karleskint, who is a former Republican legislator from Tonganoxie, said he anticipates legislators will find "a good combination of all three" bills.

"Whether it's two days or four days, whether it's art supplies or clothing, I would say yes to it all," Knoell said.

This article originally appeared on Topeka Capital-Journal: Kansas back-to-school sales tax holiday debated in Legislature