Microbreweries Production; Alcoholic Candy; Domestic Beer in Refillable Containers; Hours of Sale for Alcohol; Self-service Beer from Automated Devices; HB 2470 allows microbreweries in Kansas to contract with other microbreweries for production and packaging of beer and hard cider, creates and amends law related to the sale of alcoholic candy and to the sale of domestic beer in refillable containers, allows licensed microbrewers in the state to produce beer containing up to 15.0 percent alcohol by weight, increases the length of time that certain businesses may serve or sell alcohol, and allows self service beer from automated machines. 

Microbreweries Production and Packaging The bill allows microbreweries in Kansas to contract with other microbreweries for production and packaging of beer and hard cider. The contracting Kansas microbrewery will be held to all applicable state and federal laws concerning manufacturing, packaging, and labeling and will be responsible for payment of all state and federal taxes on the beer or hard cider. Production of beer or hard cider will count toward production limits in continuing law for both of the microbreweries involved in such a contract. The bill allows the beer or hard cider to be transferred to the microbrewery on whose behalf the beer or hard cider was produced, after production and packaging. 

Sale of Alcoholic Candy; Adulterated Foods The bill defines “alcoholic candy” as follows: ● For purposes of manufacturing, “alcoholic candy” means any candy or other confectionery product with an alcohol content greater than 0.5 percent alcohol by volume; and ● For purposes of sale at retail locations, “alcoholic candy” means any candy or other confectionery product with an alcohol content greater than 1.0 percent alcohol by volume. The term is included in the definition of “alcoholic liquor.” Alcoholic candy is subject to regulation by the Alcoholic Beverage Control Division (ABC) of the Kansas Department of Revenue, and a retailer ise required to have a liquor license to sell such products. In addition, the bill amends law regarding adulterated food. The bill exempts confectionery containing not more than 1.0 percent alcohol by volume from the definition of adulterated food, change from 0.5 percent. 

Sale of Domestic Beer in Refillable Containers The bill amends the definition of “domestic beer” to allow licensed microbrewers in the state to produce beer containing up to 15.0 percent alcohol by weight, changed from 10.0 percent alcohol by weight. 

The bill allows a microbrewery licensee to sell beer manufactured by the licensee in refillable and sealable containers to consumers for off-premises consumption. Such containers may not contain less than 32 fluid ounces or more than 64 fluid ounces of beer. Licensees will be required to affix labels to all containers sold, which will include the licensee’s name and the name and type of beer in such container. 

[Note: Enacted 2017 House Sub. for SB 13 amended provisions of the Liquor Control Act and Cereal Malt Beverage Act. Certain provisions of the 2017 bill were delayed in implementation until April 1, 2019. References to such date are to reconcile the provisions of the 2017 and 2018 legislation.] 

Hours of Sale and Service for Alcohol The bill increases the length of time that certain businesses may serve or sell alcohol. Establishments licensed to serve alcohol will be allowed to sell drinks starting at 6:00 a.m. Under previous law, establishments were not allowed to sell drinks between the hours of 2:00 a.m. and 9:00 a.m. 

Farm wineries, microbreweries, and microdistilleries are allowed to sell their respective alcoholic products in their original containers between 6:00 a.m. and 12:00 a.m. on any day. Former law limited the hours these establishments could sell alcohol on Sundays, between 12:00 p.m. and 6 p.m. for farm wineries and between 11:00 a.m. and 7:00 p.m. for microbreweries and microdistilleries. 

“Day” means 6:00 a.m. until 2:00 a.m. the following calendar day. 

Self-service Beer from Automated Devices The bill allows licensed public venues, clubs, and drinking establishments to provide self-service beer to customers from automated devices in the same manner as is permitted for wine under continuing law, so long as the licensee monitors the dispensing of beer and can control such dispensing. 

Definitions The bill defines an “automated device” as any mechanized device capable of dispensing wine or beer directly to a customer in exchange for compensation that a licensee has received directly from a customer. “Day” means 6:00 a.m. until 2:00 a.m the following calendar day. 

Notice A licensee will be required to provide written or electronic notice to the Director of ABC of a licensee’s intent to use an automated device at least 48 hours before the automated device is used on the licensed premises. 

Video Monitoring The bill requires any licensee offering self-service beer or wine from any automated device to provide constant video monitoring of the automated devices at all times the licensee is open to the pubic. The licensee will be required to maintain the recorded footage for at least 60 days and, if requested, provide the footage to any agent of the Director of ABC or other authorized law enforcement agent. 

Access Card Under the bill, compensation will be in the form of a prepaid access card containing a fixed monetary amount that can be directly exchanged for beer or wine from an automated device. The access cards may be sold, used, or reactivated only during the business day. The cards will be purchased from the licensee by a customer and a licensee could issue only one active card to a customer. An access card will be considered active if the access card contains monetary credit or has not yet been used to dispense 15 ounces of wine or 32 ounces of beer. The purchase of an access card is subject to the liquor drink tax. 

A customer will be required to show a valid driver’s license, identification card, or other government-issued document that contains a photograph of the customer and indicates the customer is at least 21 years of age. The bill requires each access card to be programmed to require the customer show identification before the access card could be used for the first time during any business day or for any subsequent reactivation. 

The bill requires that access cards become inactive at the end of each business day. The access card will become inactive if it is used to dispense 15 ounces of wine or 32 ounces of beer. A customer will be able to reactivate the access card to allow an additional 15 ounces of wine or 32 ounces of beer by showing identification to the licensee or licensee’s employee. 

Service Hours The bill amends the prohibited service period to last from 2:00 a.m. to 6:00 a.m. Former law prohibited public venues, clubs, or drinking establishments from allowing the serving, mixing, or consumption of alcohol on its premises between 2:00 a.m. and 9:00 a.m. 

Other Provisions The bill requires the Secretary of Revenue to adopt rules and regulations to implement the provisions of the bill relating to sales via automated devices by January 1, 2019. The bill also states that all laws and rules and regulations concerning the sale of alcohol to individuals under 21 years of age applies to the sales transaction of the access card.

A public hearing will be conducted on Friday, May 11, 2018, from 1:00 p.m. to 2:00 p.m. in the ABC Conference Room, 5th Floor of the Mills Building, 109 SW 9th Street, Topeka, Kansas to consider the adoption of the proposed rules and regulations of the Alcoholic Beverage Control Division, Department of Revenue, on a permanent basis. Learn more here.

On Friday, April 20, the Consensus Revenue Estimating (CRE) Group predicted that state revenues will be $217 million more than predicted in November for FY 18 and $316 million above estimates for FY 19.  This means that Kansas tax revenues will see a 10% increase over last fiscal year, with the 2017 income tax hike in effect.

It appears that there are sufficient ending balance predictions to fund the recently passed K-12 funding legislation at the $525 million intended level – allowing restoration of the $80 million “error” that was somehow not part of the final language.  No one knows yet if the Kansas Supreme Court will accept the proposed funding plan.  This sets up a battle for the veto session over a long list of general budget items that have not yet been negotiated, repaying internal borrowing from the highway and retirement funds, additional school funding and the Senate’s new tax bill.  The Senate tax legislation is designed to decouple Kansas income tax rules from the Trump tax changes that are predicted to raise state tax bills for those who could no longer itemize.  The Senate tax legislation increases the individual standard deduction.

Senate President Susan Wagle, R-Wichita, is quoted as follows:  "As a result of the strong (President Donald) Trump economy, these numbers include an unexpected federal windfall to the state due to federal tax reform. The surplus from this unanticipated windfall should be returned to the Kansas taxpayers. If any funds remain, we should exemplify fiscal responsibility and make the payments to KPERS that have been delayed and repay the loan that the Legislature took out last year to pay the bills. We owe it to future generations to pay back our current debts and obligations.   "When we return next week, I will urge my colleagues to pass legislation to allow Kansans who currently itemize under state tax law to continue to do so in the future."

Kansas City Retailers Conference and Legislative Luncheon

Saturday and Sunday - April 21-22, 2018

SCHEDULE 

 

SATURDAY LEGISLATORS LUNCHEON & ROUNDTABLE:

  

12:00 - 1:30 pm   Legislators and Retailers Luncheon - Informal Roundtable with State Legislators.  

Worldwide Wine and Spirits, LLC., 
17501 W 98th Street #35 - 38, Lenexa, KS 66219

News from the Kansas Legislature - liquor law changes and tax legislation updates.  Visit with area legislators.

1:30 pm  - 3:00 pm   Retailers Strategy Session - GOLD Meeting

If you are a member of KABR, you should plan to attend.  Please send recommended agenda items to davisliquor2@cox.net if you have discussion items or proposed action items.  Proposals will be forwarded to the Board for approval.  (GOLD = Goals of Liquor Dealers).  

 

Saturday Dinner:   

6:30 - 8:30 p.m.  Dinner - Join other retailers for dinner - separate checks.

 

SUNDAY EVENTS - 

 

9:30am - 12:00 pm KABR Official Business Meeting of the Board of Directors 

1st Floor Conference Room, Best Western KC Speedway Inn at the Legends

All Members are Encouraged to Attend the Official Business Meeting.

Kansas Liquor Retailers have achieved impressive success at the Kansas Legislature over the past eight years, and we have done so by working together.  Our greatest challenges are yet to come - join us! 

Questions: contact Amy Campbell at 785-969-1617 or Brian Davis at 316-990-1425

Contact the Best Western Premier KC Speedway Inn and Suites for KABR overnight rooms

10401 France Family Dr, Kansas City, KS 66111

(913) 334-4440

HB 2470 – Federal and State Affairs has added several liquor bills to this legislation which is now the Liquor Conference Committee report.  Initially, HB 2470 was a bill to allow microbreweries within the state of Kansas to contract with other microbreweries for production and packaging of beer and hard cider.  both barrels of beer and hard cider produced pursuant to such contracts would be included as part of the production limits for both contracting licensees. Calendar-year production limits in continuing law are 60,000 barrels of beer and 100,000 gallons of hard cider.   An amendment to allow members of the public to be judges at beer competitions was added on the Senate floor. That amendment was dropped by the conference committee.

Bills added in conference include:

HB 2766 and SB 433 – Self-serve beer dispensers – Introduced and supported by Topeka downtown developers and winner of a business startup contest.  Requires video surveillance, moves the wine dispenser oversight rules and regs into statute, and limits the volume sold on each purchaser card.

HB 2475 – Microbrewery rules changes – Selling refillable and sealable containers (growlers) to consumers for off-premises consumption: such containers could not contain less than 32 fluid ounces or more than 64 fluid ounces of beer. Licensees would be required to affix labels to all containers sold with the name of the product and the microbrewery.  The bill changes the alcohol content limit for beer from 10% ABW to 16% ABW. Combined with HB 2476 in committee, then added to 2470 in conference.

HB 2476 – Defines alcoholic candy as alcoholic liquor, thus allowing the sale of candy and food products containing alcohol above .05 ABW.  Controversy emerged on the Senate floor in a debate over the percentage, with Senator Denning amending to 1.0 ABW.  Concerns have come from Senator Bollier regarding Andres Chocolates and other producers.  The Conference Committee returned the threshold to .05 ABW based on federal TTB definitions, but the House rejected the report, returning it to conference.  Currently, the report sets the threshold at .05% ABW for manufacturers and 1.0% ABW for retail sales.

HB 2482 – Day Drinking Bill – allows drinking establishments to begin selling alcohol at 6 a.m. instead of current restriction at 9 a.m.  Legislation was requested by a restaurant that features breakfast and moved through local government committees rather than traditional route through federal and state affairs.  The Senate Commerce Committee amended the bill to: ● Increase the number of hours in which farm wineries, microbreweries, and microdistilleries would be allowed to sell their respective alcoholic products; and ● Allow farm winery outlets to sell individual drinks.  The latter amendment attracted debate due to concerns about the “level playing field” for restaurants.  A farm winery outlet would be allowed to serve wine by the glass manufactured by the farm winery licensee, provided the outlet is in a county where the sale of alcoholic liquor is permitted. Wine sold pursuant to the bill would not be subject to the Club and Drinking Establishment Act, and a drinking establishment license would not be required to sell the drink. Under current law, a farm winery may have up to three licensed outlets, but the outlets are not permitted to sell individual drinks. The conference committee did not retain the “wine by the glass” amendment.  (Hours - Farm wineries, microbreweries, and microdistilleries would be allowed to sell their respective alcoholic products in their original containers between 6:00 a.m. and 12:00 a.m. on any day. Current law limits the hours these establishments may sell alcohol on Sundays, between 12:00 p.m. and 6 p.m. for farm wineries and between 11:00 a.m. and 7:00 p.m. for microbreweries and microdistilleries.)

The Governor has signed a bill to create an annual $20 fee for the Division of Alcoholic Beverage Control to fund the online licensing system and maintenance.

HB 2362 – ABC Modernization Fee – Creates a $20 annual fee on license renewals to fund maintenance and updates to the online licensing system.  Fee will be paid on both initial and renewal liquor license applications. The bill maintains the current $50 application fee, but dedicates $20 of that fee to the modernization fund. The $20 modernization fee is added to the renewal application fee, which will remain at $10.  Introduced Feb 13 2017, House passed 96-28 March 6 2017. Senate FSA hearing Jan 30 2018.  Senate passed 37-3 Feb 21.  House concurred March 9 111-10.  Governor signed March 20.  Begins July 1 2018.

HB 2502 – Trailer Bill for 2017 Beer Law – Regulation and taxation of the sale of beer up to 6.0 ABV by cereal malt beverage retailers, allowed after April 1 2019.  Sales of the stronger beer by grocery and convenience stores will be subject to state and local sales taxes instead of the state liquor enforcement tax.

 Pursuant to legislation enacted in 2017 (SB 13), starting on April 1, 2019, CMB licensees will be allowed to sell beer containing no more than 6.0 percent alcohol by volume. HB 2502 clarifies that CMB licensees are under the oversight of the Director of Alcoholic Beverage Control (Director) [the Division of Alcoholic Beverage Control is within the Department of Revenue]. The Director is permitted to issue citations and impose a fine, not exceeding $1,000, for each violation of the Kansas Cereal Malt Beverage Act. Moneys collected from fines will be deposited in the State General Fund. The bill clarifies the Director will conduct the market impact study, required by continuing law to be submitted to the Legislature following the tenth anniversary of the effective date of the 2017 legislation, using information available to the Director.  Introduced Jan 17.  Hearing Jan 29.  House passed 117-6 Feb 8. Senate hearing Feb 28. Senate passed 39-0 March 7. Governor signed March 15.

In April 2017, the Kansas Legislature passed House Substitute for SB 13, now known as the Beer Compromise.  There were many reasons for the compromise proposal, but the strongest was to retain the clear State priority for the safe and efficient regulation of the sale of alcoholic liquor and the role of the independent liquor store as the retailer of higher alcohol beer and wine and spirits.

HB 2502 – Trailer Bill

At that time, industry members believed that some details of the plan might require follow-up legislation.  During the interim, representatives of KABR participated in meetings facilitated by the Division of Alcoholic Beverage Control to develop rules and regulations and possible cleanup language.  The product of those conversations includes HB 2502 and new rules and regulations.

Support State Authority and Scope of Ten-Year Report

The Kansas Association of Beverage Retailers (KABR) respectfully supports language to further clarify the authority of the Division of Alcoholic Beverage Control to enforce the legislation and the language defining information to be included in the ten-year impact report to the Legislature.

Neutral on Sales Tax

KABR is neutral on the tax policy established in HB 2502.  As many of you will recall, cereal malt beverage is currently subject to sales tax while strong beer is subject to the 8% enforcement tax.  How the tax will be levied has a fiscal impact on the State, cities and counties.  It also has an impact on the competitive price of the product at retail.  Liquor sales were $846.5 million in 2016, generating $67.8 million in revenue.

100% of the enforcement tax is deposited in the State General Fund, while sales taxes are split with local governments.  The State collects the base rate of 6.5%, but the amount due to the local authorities varies.  Not only do rates differ between cities and counties, but special taxing districts may levy different rates for businesses in the same neighborhood.

As a result, the retailers across the state have differing opinions on the question of how the product should be taxed.   Therefore, KABR is neutral on the tax policy established in HB 2502, but reserves the option to change that position if there are amendments.  Our small businesses should not be penalized by new tax policies that disadvantage current licensees.

Background:  Tax Question

If economic studies are correct, a significant percentage of the beer sold in Kansas after April 2019 will be sold by the CMB retailers – the grocery stores, convenience stores and others. 

Former versions of Uncork Legislation had proposed sharing 3% of all enforcement taxes with cities and counties.  This concept was problematic because it would redistribute revenue in a manner that may or may not reflect the actual cereal malt beverage sales taxes lost by communities.

As proposed in HB 2502, the CMB retailers will pay sales taxes on strong beer sales in the same way they currently pay sales taxes on cereal malt beverage (CMB) sales.  Cities and counties have requested this language because they receive a portion of sales taxes and are concerned the new law will reduce local tax revenues.

The State of Kansas has interpreted the new law to require CMB retailers to pay the 8% liquor enforcement tax on strong beer (Enforcement taxes go to the State General Fund.)  We do not know how much revenue the State or the cities may lose or gain under either scenario - the revenue change may be very small since the State sales tax rate is 6.5% and the cities and counties vary in what they charge above the state rate. A review of the sales tax rates by taxing jurisdiction show that many Kansas communities pay a higher sales tax rate than 8%. See rates here https://www.ksrevenue.org/pdf/5digitzip0118.pdf.

Background:  Contents of the 2017 Beer Legislation

As the states around us have changed their liquor laws, the wisdom of the 2017 Beer Compromise has come into focus.  In Oklahoma, the 2016 public referendum opened the sale of strong beer and wine to the corporate chain retailers without corresponding equalization of the regulatory framework for liquor retailers.  Colorado’s 2016 legislation expanded the number of outlets for retail liquor stores and for corporate pharmacy liquor licensees, but less attention was paid to the one-strength beer policy in the legislation.  Both of these states will trade cereal malt beverage sales for strong beer, but without the important considerations for regulation and long-term economic viability included in Kansas law.

Beginning April 1, 2019 –

·         CMB retailers will sell beer up to 6 percent alcohol by volume,

·         Liquor retailers may sell all current beer, wine, and spirits products plus cereal malt beverage, 

·         Liquor retailers may sell other products up to 20% of gross sales,

·         Liquor retailers may sell tobacco products and lottery tickets, except that the sale of tobacco products and lottery shall not be included in the 20% limitation,

·         The Division of Alcoholic Beverage Control will enforce the law in both retail environments

·         The Division of Alcoholic Beverage Control will issue an impact study ten years after implementation to report the market impact of the law change. 

·         The Uncork proponents agree that ten years will be a reasonable time to measure the impact on the industry without further legislation to expand the locations where liquor products are sold,

·         Statutes and regulations are modified to include application of trade practice, nondiscrimination and price rules to CMB and liquor licensees,

·         CMB retailers will continue to be licensed by cities and counties, liquor stores will continue to be licensed by the state,

·         Distributors may require minimum orders for delivery, as well as retaining current definitions for CMB and beer for purposes of their franchise agreements,

·         Kansas will retain the separate retail licenses for the sale of stronger alcohol products v. limited alcohol beer.

Today and after April 2019, the Kansas independently owned retail liquor stores are the state regulated off premise retailer of higher alcohol beer and all wine and spirits products.  It is imperative that Kansas retain this important role for our independently owned Kansas retail liquor stores for the sake of public safety and for our small businesses.

It is unfortunate that so many other states, including Oklahoma and Colorado, are moving away from this efficient and effective regulatory model.

We hope that legislators will fully understand the significance of this proposal and the tenuous agreement it represents. 

                                      

Respectfully submitted by Amy Campbell, Executive Director

785-969-1617 campbell525@sbcglobal.net

How will the State Tax Beer up to 6.0% sold by CMB Off-Premise Retailers after April 2019? When the Kansas Legislature passed the “Beer Law” during the 2017 Session, the question of how to tax the strong beer sales at CMB outlets was left open.  Income Tax Legislation was occupying most of the Legislature’s time in May and June, so the question of how SB 13 would impact taxes on strong beer was left to 2018.   "Beer up to 6.0%" does not include 3.2% CMB. Currently, the State collects 8% liquor enforcement tax on all strong beer, wine and spirits sold by retail liquor stores to the public or sold by wholesalers to on-premise retailers. Sales tax is paid on all cereal malt beverage products sold by CMB retailers to the public. This was a topic of discussion at a recent meeting for liquor industry organizations hosted by ABC Director Debbi Beavers.  The meeting covered possible trailer legislation and proposed changes to rules and regulations.   New rules and regulations will be drafted in the next two months for approval.   The Tax Issue will be part of a trailer bill during the 2018 Legislative Session.  There are two ideas being discussed and they are described below. Hopefully, the description will help members decide how and if KABR should have a position on this question.  KABR members will debate this and other questions at the annual meeting this weekend in Wichita.  1.      Situs of Taxation – This literally means “place of taxation”.  In other words, where the sale takes place determines the tax that applies.  Positives: Cities and Counties would continue to receive the local portion of sales tax revenue, and could see increased revenues if the sales of strong beer in the convenience and grocery stores exceed the sales of cereal malt beverages.   (Cities and Counties are still primarily responsible for licensing and regulating CMB Retailers. The Kansas League of Municipalities supports this option and will ask that legislators allow the funds to continue to go into their general revenue fund, not require that money to be spent for designated purposes.  Many see this as the simplest solution – it would avoid requiring CMB Retailers to remit a new tax to the State and the administrative costs to the State and the retailers for setting up the new remittance.   Could also apply to CMB sales by Retail Liquor Licensees. Retains the separate nature of CMB Retailers v.Retail Liquor Licensees. Concerns: CMB Retailers would pay a different tax rate on the same product.  This would benefit CMB Retailers in areas where the sales tax is less than 8% and benefit Retail Liquor Licensees where the sales tax is higher than 8%. State would lose revenue.  Currently, the State retains 6.5% of sales tax revenues but retains the full 8% enforcement tax. Need to address the tax to be paid on beer purchases by CMB On-Premise licensees (taverns) for re-sale.  NOTE: CMB On-Premise licensees can currently sell CMB by the package. Currently, Kansas does not track sales tax revenue on the sale of cereal malt beverages. If strong beer sales are not reported separately, the Division of Alcoholic Beverage Control will only be able to track strong beer sales in CMB outlets through gallonage reports from wholesalers.  (NOTE: Alternatively, the Department of Revenue could require a separate line item for strong beer sales tax OR audit strong beer sales through CMB outlets over a period of time in order to create an algorithm that would provide this data.) 2.      Licensees Pay 8% Liquor Enforcement Tax – This would require CMB Retailers to begin paying the 8% Liquor Enforcement Tax when selling strong beer. Positives: CMB Retailers and Retail Liquor Licensees would pay the same taxes on the same products. The State would retain the revenues from sales of strong beer and possibly see increased revenues, depending whether or not the legislation creates a sharing formula with local cities and counties.  The State has an important interest in tracking the sales volumes to know where stronger products are being sold.  (NOTE: Alternatively, the Department of Revenue could require a separate line item for strong beer sales tax OR audit strong beer sales through CMB outlets over a period of time in order to create an algorithm that would provide this data.) Concerns: Cities and Counties would lose revenue.  The Legislature could choose to implement the3% sharing formula that has been a part of previous versions of Uncork bills,but many believe that the new distribution formula could not accurately replacelost sales taxes from the areas who sell the most CMB products.  Winners would be based on population and notactual sales data.  The new state tolocal revenue transfers would be subject to state sweeps. Retail Liquor Stores support their cities and countiesand full funding of the important services these local communitiesprovide.  This is just one of the important issues to be discussedthis weekend at the KABR Annual Conference: Planning for a New Market.   RSVP to Attend Here! Other issues: 1.   Proposal to pass legislation to allow retailers to charge customers for tastings. 2.  Proposal to pass legislation to allow third party delivery "apps" - such as DRIZLY. 3.  Proposed changes to rules and regulations to assure State regulation of price non-discrimination and trade practice rules. 4.  New rules for inside entrances and vestibules as it relates to liquor stores being allowed to sell other products. 5.  Tobacco sales, taxation and licensing. And more! Contact:    Brian Davis, President  316-990-1425  Email President Amy Campbell  785-969-1617   Email Lobbyist

Impact of Changes to Kansas Income Tax

The Kansas Department of Revenue has issued new notices regarding changes in tax rates and policies in effect July 1, 2017, as a result of the passage of Sub for SB 30 by the 2017 Kansas Legislature.  The 2017 session was all about filling a budget hole and Kansas businesses and individuals are affected immediately.

The rate increases are retroactive to January 1, 2017, which means that businesses and individuals should begin as soon as possible to withhold or set aside the necessary funds for Kansas income taxes.

Sub for SB 30 reinstates taxes on non-wage income for small businesses and raises rates for individual income taxes for 2017 and again in 2018.  It also divides taxpayers into three brackets, instead of two.  The income tax rates were not raised to pre-2012 rates, but will result in smaller paychecks for Kansas employees. 

Department of Revenue Notices:  https://www.ksrevenue.org/prnewtaxnotices.html 

The Kansas Department of Revenue has released new tables for employers to increase withholdings beginning on July 1 to match 2018 rates.

In a statement, the agency said it is using the 2018 rates in its tables for 2017 to “ensure that enough income is withheld from paychecks to catch up for the increased and backdated tax liability in the second half of the year, and also to provide certainty for Kansas employers.”  Read more at Kansas.com here:  http://www.kansas.com/news/politics-government/article158628974.html 

Employers are asked to begin withholding at the higher rate as of July 1.  Read the notice:  https://www.ksrevenue.org/taxnotices/notice17-02.pdf.  Find the new withholding tables here:  https://ksrevenue.org/forms-btwh.html

Non-wage income filers, such as sole proprietors or LLC owners, are asked to begin making estimated payments immediately-  https://ksrevenue.org/pdf/k-40es17.pdf - although penalties will not be assessed now. 

Additionally, the 2018 due dates for remitting withholding tax to the state and for notifying employees of taxes withheld have changed from the last day of February to January 31.