Chairperson Smith opened the hearing on HB2773.  

Adam Siebers provided an overview on HB2773 and stood for question from the Committee. (Attachment 1)

Kathleen Smith, Kansas Department of Revenue, provided an overview on the fiscal note for HB2773 noting the Kansas Department of Revenue is unable to provide an estimate because of confidentiality concerns due to there  being fewer than five filers that would qualify for the specific provision.  Ms. Smith stood for questions from Committee members.

Proponents:

William Wilk, Kansas Chamber, testified as a proponent to HB2773 stating it modified the alcohol manufacturing exemption passed from the single factor apportionment legislation in 2025.  After the passage of HB2331, the Chamber received a call from one of the alcohol manufacturing members based out of Atchison, Kansas noting they would like to utilize the single factor apportionment which was unintentionally carved out of HB2331.  Mr. Wilk stated at least two states have passed the single factor apportionment with the carvevout for alcohol manufacturers that was passed in HB2331.  The Chamber worked out language setting parameters for alcohol manufactures allowing those instate to utilize single factor apportionment while maintaining the 3-factor approach for out of state manufacturers. (Attachment 2)   

Jeff Rogers, Director of Tax and Insurance, MGP Ingredients, Inc., testified as a proponent for HB2773 noting MGP is proposing language that would allow certain out-of-state companies to continue to benefit from the three-factor apportionment of the original law, while benefiting in-state companies by allowing those with significant investment and payroll in Kansas to use single sales factor apportionment, which matches what all non-alcohol manufacturing companies will be required to use starting in 2027. (Attachment 3)   

Jason Watkins, Executive Director, Kansas Beer Wholesales Association, testified as a proponent for HB2773 that preserves the exemption framework adopted last year while allowing certain alcoholic liquor manufacturers to elect into single sales factor apportionment if they demonstrate substantial investment in Kansas. (Attachment 4)   

The conferees stood for questions from Committee members.

No opponent or neutral testimony was submitted for HB2773.

Chairperson Smith closed the hearing on HB2773.