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TOPEKA — The House Taxation Committee began hearings on a bill that would rollback sales tax exemptions for non-profit groups, including the YMCA.

Supporters of House Bill 2549, said many of the exempt non-profit and charity groups do commendable work but specific exemptions for various groups added over time have resulted in an unfair tax code that leaves some do-gooders paying taxes but others not, depending largely on legislative whim.

"Although many of the organizations whose exemptions (would be) eliminated do good works, so does the average Kansas taxpayer who gives a homeless man a cup of coffee or helps an elderly neighbor shovel their driveway," said Lori McMillan, a Washburn University Law School professor who specializes in tax law, "The fact that good is done should not be the standard or tax exemption from sales tax; otherwise, every kind and noble act would need to be evaluated to see what tax benefit it brings."

Legislative researchers estimated that eliminating the exemptions spelled out in the bill would mean an additional $172 million for state coffers in fiscal 2011, which begins July 1, and also would increase by about $15.4 million the amount of money raised by local units of government.

Among the exemptions that would be deleted by the bill is one for residential utilities. There currently is no state sales tax levied on the purchase of natural gas, electricity or other residential utilities.

Others told committee members that eliminating exemptions would make it easier for lawmakers to lower overall tax rates at some point, though the bill itself would not do that.

"The golden rule of taxation is the broadest possible base, the lowest possible rate," said Randy Allen of the Kansas Association of Counties.

Two spokesmen for private health clubs told lawmakers they supported the bill because it would level the playing field for them with the YMCA, which they characterized as a business enterprise first, charity second.

The committee also heard from one opponent of the bill though more are scheduled to speak against it on Friday.

Emily Compton of Goodwill Industries said the non-profit has about 350 employees in Wichita and western Kansas. She said removing the group's sales tax exemption would lead to layoffs of people who probably couldn't find jobs elsewhere.

She said Goodwill is already being hard hit by an increase in unemployment insurance levies and the loss of a sales tax exemption would cost the organization another $40,000 to $50,000 a year.

"Frankly, I don't know how we would do it," she said.