Sales Tax Hike Advances

Kansas state senators voted last week to send to the House a measure raising the sales tax rate to 6.3% from 5.3% on July 1. The tax increase would generate $314 million in fiscal 2011 to help cover a $350 million revenue shortfall in a $13.6 billion budget adopted earlier by the Senate.

Twenty-three senators voted in favor of the hike, with 17 opposed.

The measure calls for the sales tax rate to drop to 5.7% in July 2013, with revenue from the additional 0.4% earmarked for highway construction and maintenance.

Senators rejected a plan to eliminate a $17 million tax credit for some business operations, as well as proposals to increase the tax on a pack of cigarettes to $1.79 and the tax on other tobacco products to 70% from the current 10%.

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