- Associated Press - Tuesday, May 17, 2016

LAWRENCE, Kan. (AP) - Bill Self isn’t paying state taxes on the bulk of his millions of dollars of income as men’s basketball coach at Kansas, and it’s all legal under 2012 tax reforms pressed by Gov. Sam Brownback.

KCUR Radio (https://bit.ly/1Tkll2m ) reports that while Self - the state’s highest-paid employee - earns a taxable salary of $230,000 a year, he also gets at least $2.75 million annually from the entity that runs the school’s intercollegiate sports. Those millions go to Self’s BCLT II limited liability company, which is among the nearly 334,000 Kansas businesses that owe no state income taxes under the 2012 tax cuts.

Before Brownback signed the tax cuts, the top tax bracket was 6.45 percent - a rate under which Self would have owed up to $177,375 a year in state taxes. Under the lower top rate of 4.6 percent, he’d have owed up to $126,500.

Self formed his LLC while he was the head coach at Illinois, years before the tax reductions.

His attorney, Stuart D. Campbell in Tulsa, Oklahoma, declined to discuss Self’s finances, citing attorney-client privilege.

While saying he likes Self, state Senate Minority Leader Anthony Hensley, a Topeka Democrat, argues that while the cuts were meant to create jobs, Self doesn’t do that.

“KU people, obviously, like him very much,” Hensley said. “But it’s bad policy when you’ve got the highest paid state employee in the state not paying any income taxes into the state of Kansas.”

Self is not the only coach at Kansas who gets compensated both as a salaried employee and as an independent contractor via an LLC. The Jayhawks’ football coach, David Beaty, receives a salary of $225,000 a year, as well as $575,000 through his LLC. Unlike Self, Beaty created his LLC last year, well after the Kansas tax cuts were enacted.

“If they passed a provision like this in Washington, D.C., where I live and work, I would go to my employer the next day and ask them to start paying me as an independent contractor,” Scott Drenkard, an economist with the conservative Tax Foundation, has recently testified before the Kansas House Committee on Taxation.

“I would still be doing the same job and contributing the same value to the economy,” he told the panel, which was considering a bill to eliminate the income tax exemption. “I just wouldn’t be paying any income taxes.”

At Wichita State, men’s basketball head coach Gregg Marshall signed a deal last year paying him $3 million annually, making him among the highest paid coaches in college basketball. And his counterpart at Kansas State, Bruce Weber, signed a deal in 2012 that calls for him to be paid $1.9 million this season.Neither gets paid additional money through an LLC or other pass-through businesses, meaning they pay Kansas income taxes on their salaries.


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