NFIB to Testify Against Bill Raising Small Business Filing Fees 400%

Date: February 16, 2017

Dan Murray, state director of the National Federation of Independent Business, will go before the House Taxation Committee today to testify against House Bill 2315, legislation that would dramatically increase business filing fees in Kansas. Click here to read Murray’s written testimony.

“HB2315 arbitrarily increases the cost of doing business in Kansas for small business owners,” Murray said. HB2315 is the House version of Senate Bill 175. Murray testified against the Senate bill on Monday.

Currently, every for-profit corporation in Kansas is required to file an annual reporter with the secretary of state’s office. The report is perfunctory and includes basic information about the business, such as the business’ location and the names of its officers. Under existing law, the filing fee is $40.

HB2315 and SB175 would increase the filing fee by 400 percent, to $200.

In addition, the legislation would require all partners in a corporation to pay an additional $200 fee. If a corporation had six qualifying partners, the filing fee would skyrocket from $40 today to $1,400 overnight—the basic $200 filing fee plus an additional $200 fee for each of the six partners.

Murray called that proposed increase exorbitant and excessive.

 

Written Testimony in Opposition to HB2315 Before House Taxation Committee
Daniel Murray, Kansas State Director
Thursday, February 16, 2017

On behalf of the National Federation of Independent Business (NFIB), thank you for the opportunity to submit written testimony on HB2315. NFIB is the state’s leading small business organization representing small and independent businesses. A non-profit, nonpartisan organization founded in 1943, NFIB represents the consensus views of its over 4,200 members in Kansas.

The NFIB opposes HB2315, which exorbitantly increases the annual business filing fees for small business. Under current law, every domestic corporation organized for profit must file an annual report to the secretary of state. The report is relatively perfunctory and must include various information about the business, such as the name and principal location of the corporation, names of the officers, etc. HB2315 would increase the fee for filing such report from $40 to $200 annually. This represents a 400% increase! 

Further, the bill would require that in addition to the entity filing fee, each qualifying percentage owner(s) in an LLC or substantive partner(s) in various forms partnerships also pay the $200 filing fee. Under current law, only the entity must pay the $40 fee. The proposed fee expansion in HB2315 will result in a massive new expense for many small businesses. For example, a small business partnership with 6 partners currently pays $40 annually.  HB2315 would not only increase the entity fee to $200, but also expand to include a $200 fee from each of the 6 partners, assuming they meet the requisite ownership interest. In this example, if all 6 partners qualify, this small business would see their filing fee skyrocket from $40 to $1,400 overnight—just for the “right” to do business in Kansas.

HB2315 arbitrarily increases the cost of doing business in Kansas for small business owners. The proposed annual filing fee increases are excessive and are not reflective of the actual processing cost to the Secretary of State.  Further, the increases do not account for the financial viability or income attainment of the filing entity. Our members strongly urge you to oppose the bill.

 

 

 

 

 

Related Content: Small Business News | Kansas | Taxes

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