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Landlords of Johnson County, Kansas INC M A R C H 2 0 1 7 V O L U M E 1 7 I S S U E 3

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LEGISLATIVE ALERT KS Gov. Brownback vetoes House Bill 2178 on 02/22/2017

Senate Motion to override veto failed; Veto sustained; Yea: 24 Nay: 16

The Senate approved a package on increasing personal income taxes and eliminating a tax ex-emption for businesses (aka the LLC exception).

////////////////////////////////////////////// Note from Irene:

To view the history of this legis-lation, hold down the Control key, then click the link below.

House Bill 2178

LJC will be watching what the governor does next...

////////////////////////////////////////////// If you have an LLC be sure to view the article on pages 2 - 3 about Senate Bill 175.

Book Reviews Roofing 

The Kansas Legislature - Senate Bill 175 Do you have an LLC in Kansas? Some legislators in the State-house would like to see a few heavy handed changes for LLCs that make a profit.

Are you grateful for the Kansas LLC income pass through? If SB175 passes, you can kiss that goodbye and say hello to a $200 annual filing fee.

And every shareholder or part-ner owning 5% or more of the entity each will pay a $200 fee. Wow…

The remainder of this article is an excerpt from the Fiscal Note for SB175 --- written by Shawn Sullivan the Director of the Budget.

SB 175 is a comprehensive tax bill that implements the Gover-nor’s tax policy changes for the 2017 Legislative Session. The bill would increase the annual report filing fee that is collected by the Secretary of State’s Of-fice for all for-profit entities from $40 to $200. The bill would require that all sharehold-ers and partners owning at least 5.0 percent of the business entity to also pay a $200 annual report filing fee.

The bill would increase the state’s cigarette, tobacco prod-ucts, and liquor enforcement taxes on July 1, 2017. The bill would increase the cigarette tax

to $2.29 a pack (from $1.29 a pack), increase the tobacco products tax to 20.0 percent of the wholesale price (from 10.0 percent), and increase the liquor enforcement tax to 16.0 percent on gross receipts (from 8.0 per-cent). The bill would establish an inventory tax for all cigarette and tobacco products on hand as of July 1, 2017. The inventory tax would be $1.00 per pack for cigarettes and 10.0 percent of the wholesale sales price for to-bacco products on hand as of July 1, 2017 and the inventory tax would be due on July 31, 2017.

The bill would freeze the indi-vidual income tax rate for in-come under $15,000 ($30,000 for married filing jointly) at 2.7 percent in tax year 2018. The tax rate was set to reduce from 2.7 percent to 2.6 percent in tax year 2018. Future rate reduc-tions would be determined by the automatic income tax rate reduction procedure that has the potential to reduce individual income tax rates beginning in tax year 2021. The bill would eliminate the Community Ser-vices Contribution Tax Credit beginning in tax year 2018.

The bill would require all pas-sive income from rents and roy-alties to be included as income for Kansas income tax purposes

beginning in tax year 2018. This fiscal note assumes that the tax on all passive income from rents and royalties would be retroac-tive to include tax year 2017 to coincide with the Governor’s proposal.

The Department of Revenue es-timates that SB 175 would in-crease State General Fund reve-nues by $191.5 million in FY 2018 and by $201.9 million in FY 2019. The specific changes in State General Fund revenues for FY 2018 and FY 2019 are shown in the following table:

________________________

FY 2018 FY 2019

Annual Report Filing Fees $33,600,000 $33,600,000

Cigarette Tax to $2.29 per pack 52,800,000 46,400,000

Tobacco Products Tax to 20.0 Percent 7,000,000 7,800,000

Liquor Enforcement Tax to 16.0 Percent 52,300,000 54,700,000

Freeze Lower Rate at 2.7 Per-cent 4,800,000 16,100,000

Community Service Contribu-tion Tax Credit 1,000,000 3,300,000

Passive income (Rents & Royal-ties) 40,000,000 40,000,000

Total SGF Changes $191,500,000 $201,900,000

________________________

Continued on page 3

P A G E 2 L A N D L O R D S O F J O H N S O N C O U N T Y , K A N S A S I N C

P A G E 3 L A N D L O R D S O F J O H N S O N C O U N T Y , K A N S A S I N C

The Department of Revenue indicates that State General Fund estimates for FY 2018 and FY 2019 are based on the November 2016 Consensus Revenue Estimate.

The annual report filing fee changes were calcu-lated by the Division of the Budget from data on the number of business entities from the Secretary of State.

The Secretary of State indicates they do not have data on the amount of shareholders and partners owning at least 5.0 percent of the business entity that would now be required to pay the annual $200 filing fee.

The fiscal note assumes 25.0 percent of LLCs would have at least one shareholder and an aver-age of three partners would own at least 5.0 per-cent of the business entity and would be required

to pay the additional annual $200 filing fee.

The FY 2018 estimates for cigarettes and tobacco products include a total of approximately $11.5 million for the inventory tax. The FY 2018 esti-mate assumes that the tax on all passive income from rents and royalties will be retroactive to be-gin on January 1, 2017.

The Department indicates that the bill would require $88,828 from the State General Fund in FY 2018 to implement the bill and to modify the automated tax system.

Continued from page 2

''Politics is the art of looking for trouble, find-

ing it everywhere, diagnosing it incorrectly,

and applying the wrong remedies.''

Groucho Marx

P A G E 4 L A N D L O R D S O F J O H N S O N C O U N T Y , K A N S A S I N C

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Johnson County Fast Facts From the County Website

Population: Johnson County is the most populous county in the state of Kansas.

20 Cities: Overland Park, Olathe, Shawnee, Leawood, Lenexa, Mission, Mission Hills, Mission Woods, Merriam, Lake Quivira, Fairway, Westwood, Westwood Hills, Prairie Village, Roeland Park, De Soto, Spring Hill, Gardner, Edgerton, and Bonner Springs.

6 Public School Districts: Shawnee Mission, Olathe, Blue Valley, Spring Hill, Gardner-Edgerton, and De Soto. Student enrollment (K-12) totaled more than 88,500 for the 2011-2012 school year. That’s more than the populations of 100 counties in Kansas.

7 Townships: Lexington, Olathe, McCamish, Spring Hill, Gardner, Oxford, and Aubry.

Size: 477 square miles or approximately 307,200 acres.

Median age: 36.5

Median Household Income (Estimated 2012): $74,761

Miscellaneous Statistics:

Residential parcels: 168,000+, including single-family, multi-family, condominiums, townhouses, and farmsteads. Public schools: 186 buildings in 6 public school districts Community centers/multi-service centers: 10 Airports including heliports: 11 Apartment complexes: 360 Places of worship: 312 Colleges: 3 Jails: 3 Hospitals: 6 Museums: 10 Libraries: 16 Creeks: 26 Golf courses: 28 Fire stations: 39 Nursing homes: 66 Cemeteries: 39 Hotels: 77 Shopping centers: 90 Historic sites: 123 Restaurants: 1,522 Retail parcels: 1,533 Office parcels: 1,609 Warehouse parcels: 1,933 Law enforcement stations: 18 Miles of city streets: 3,606 Miles of biking, jogging, hiking trails: 268 Miles of bicycle roadway routes: 102 Private schools: 42 buildings Swimming pools, beaches, and aquatic centers: 27 Parks: 340 (city and county) with approximately 16,000 acres Miles of county roads: 476 -about 224 miles of gravel roads. Farms: 610, - 29 with 1,000+ acres- (252) with 10 to 49 acres

P A G E 5 L A N D L O R D S O F J O H N S O N C O U N T Y , K A N S A S I N C

HUD Claims One Third of US Population has Criminal Record!

I wonder if the facts in the above HUD letter are accurate and worse, true? No wonder landlords have difficulty finding and qualifying applicants?

Now, I’ll always worry about my safety when showing a vacancy because according to HUD, nearly one in three U.S. citizens have a criminal record !

There’s this one quote from a movie long ago that keeps playing over and over in my mind...

“Nothing matters but the facts. Without

them, the science of criminal investigation is

nothing more than a guessing game”

Blake Edwards

P A G E 6 L A N D L O R D S O F J O H N S O N C O U N T Y , K A N S A S I N C

Kansas State Senators From Johnson County

Office State Name District Home City Zip Office #

Senator KS Julia Lynn 9 Olathe 66061 785-296-7382

Senator KS Robert Olson 23 Olathe 66062 785-296-7358

Senator KS Barbara Bollier 7 Mission Hills 66208 785-296-7390

Senator KS John Skubal 11 Overland Park 66209 785-296-7301

Senator KS Jim Denning 8 Overland Park 66210 785-296-2497

Senator KS Mary Pilcher-Cook 10 Shawnee 66216 785-296-7362

Senator KS Dinah Sykes 21 Lenexa 66220 785-296-7367

P A G E 7 L A N D L O R D S O F J O H N S O N C O U N T Y , K A N S A S I N C

Tenants & Tax Deductions

Every Landlord’s Guide to Finding Great Tenants

by Janet Portman

Published - 2013 by Nolo

Choosing tenants is a landlord's most important (and

most risky) decision -- find out how to do it safely and

legally! Let this book guide you through the process of

attracting, screening and selecting the best renters

available. Get timely advice on: - evaluating applications

- examining credit reports - discrimination basics "--

"Searching for the perfect tenant? Get the only book

devoted to the most important decision a landlord can

make! This book is available at the County Library.

Every Landlord’s Tax Deduction Guide

by Stephen Fishman

Published - 2017 by Nolo

This book is available at the Johnson County Library. It

Offers advice to landlords on maximizing tax deduc-

tions, addressing how to file with the new rules for

Airbnb, take real estate tax credits, maximize deprecia-

tion deductions, and deduct home office, travel, and

casualty losses

P A G E 8 L A N D L O R D S O F J O H N S O N C O U N T Y , K A N S A S I N C

Where’s My Refund? has been updated for those refunds containing the Earned Income Tax Credit and the Additional Child Tax Credit that had been held by law. Barring other issues, taxpayers should see those refunds in their financial accounts begin-ning the week of Feb. 27.

Just a reminder, “Where’s My Refund?” is up-dated once daily so checking it multiple times per day will not produce new or different results.

To use “Where’s My Refund?”, taxpayers need their Social Security number or Individual Taxpayer Iden-tification Number, filing status (single, married filing jointly, etc.) and the exact amount of the refund claimed.

Where IS My Tax Refund??? Get easy-to-read tips about taxes via e-mail from the IRS. Tips are issued each business day during the tax-filing season and three times a week in the sum-mertime. Special Edition Tax Tips are issued peri-odically throughout the year to highlight important topics of interest to the public. Health Care Tax Tips are issued to explain various aspects of the tax provisions that are part of the Affordable Care Act.

Tax Tips are brief, to the point and cover a wide-range of topics, including:

Common errors to avoid

Where you can get free tax help

Guidance on available tax deductions & credits

How e-file can make filing easier, get you your refund faster and protect your payments

How to file an extension or amend your return Subscribe / Unsubscribe Link

Subscribe to get IRS Tax Tips

What’s the difference between a tax auditor

and a Rottweiler?

Eventually, the Rottweiler lets go! — anonymous

P A G E 9 L A N D L O R D S O F J O H N S O N C O U N T Y , K A N S A S I N C

ASSOCIATION OFFICERS

President Irene Doll 913-961-1480

Vice Pres. Don Grisham 913-722-0505

Secretary Mary Durham 913-341-8354

Treasurer Billie Grimes 913-722-1584

COMMITTEE CHAIRS

Budget & Finance Billie Grimes 913-722-1584

Discounts Irene Doll 913-961-1480

Hospitality Traci Lawton 913-579-3662

Legislative Don Grisham 913-722-0505

Membership Traci Lawton 913-579-3662

Don Grisham 913-722-0505

Marilyn Dugan 913-722-6794

Member Services Randy Ellis 913-829-3226

Newsletter & Ads Irene Doll 913-961-1480

Nominations Greg Lawton 913-226-6277

Program Lisa McKay 913-226-6277

Greg Lawton 913-262-2277

EXECUTIVE BOARD MEMBERS TERMS REMAINING

Three Years Marilyn Dugan Greg Lawton

Traci Lawton

Two Years Luci Mayer

One Year Lisa McKay Randy Ellis

EXECUTIVE BOARD MEETINGS

The Executive Board meets at 5:30-7:00 pm, immediately before the Membership Meeting. Hearth Room Matt Ross Community Center 8101 Marty Overland Park, Kansas

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P A G E 1 0 L A N D L O R D S O F J O H N S O N C O U N T Y , K A N S A S I N C

P A G E 1 1 L A N D L O R D S O F J O H N S O N C O U N T Y , K A N S A S I N C

LANDLORDS OF JOHNSON COUNTY, KANSAS INC. PO BOX 4282 SHAWNNE MISSION, KS 66204 FORWARDING SERVICE REQUESTED

Next Meeting: March 1, 2017