Session of 2023
HOUSE BILL No. 2275
By Committee on Commerce, Labor and Economic Development
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AN ACT concerning income taxation; relating to credits; increasing the
maximum yearly amount of credit available for purchases under the
disability employment act from qualified vendors and continuing in
existence such credits beyond tax year 2023; defining qualifying
vendors and eligible employees; amending K.S.A. 79-32,273 and
repealing the existing section.
Be it enacted by the Legislature of the State of Kansas:
Section 1. K.S.A. 79-32,273 is hereby amended to read as follows:
79-32,273. (a) For tax years 2019 through 2023, The provisions of this
section shall be known and may be cited as the disability employment act.
(b) A credit shall be allowed against the tax imposed by the Kansas
income tax act in an amount equal to 15% of the amount for expenditures
of goods and services purchased by the taxpayer from a qualified vendor
on and after January 1, 2019, and before January 1, 2024, as certified by
the secretary of commerce as provided in subsection (c) (d). The amount
of such credit awarded for each taxpayer shall not exceed $500,000 per
qualified vendor per tax year. In no event shall the total amount of
cumulative credits allowed under this section exceed:
(1) $5,000,000 for tax years 2019 through 2023;
(2) $10,000,000 for all tax years that the credit remains in effect tax
years 2024 through 2028; and
(3) $10,000,000 for each consecutive five tax years thereafter
starting with tax year 2029.
(b)(c) The tax credit allowed by this section shall be deducted from
the taxpayer's income tax liability for the tax year in which the
expenditures were made by the taxpayer. If the amount of such tax credit
exceeds the taxpayer's income tax liability for such tax year, the taxpayer
may carry over the amount that exceeds such tax liability for deduction
from the taxpayer's liability in the next succeeding tax year or years until
the total amount of the tax credit has been deducted from tax liability,
except that no such tax credit shall be carried over for deduction after the
fourth tax year succeeding the tax year in which the expenditures were
incurred.
(c)(d) The secretary of commerce shall annually certify that
expenditures for goods and services purchased by a taxpayer subject to the
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tax credit provided in this section were made from a qualified vendor, and
provide such certification to the secretary of revenue. The secretary of
commerce is hereby authorized to promulgate rules and regulations for
establishing criteria based on the provisions of K.S.A. 75-3317 et seq., and
amendments thereto, for evaluating whether purchases by taxpayers from a
qualified vendor should be certified as provided in this section, with the
assistance and approval of the secretary of revenue.
(d)(e) As used in this section:
(1) "Certified business""Qualified vendor" means:
(A) Any business certified by the department of administration that
qualifies as a certified business pursuant to K.S.A. 75-3740, and
amendments thereto, and is a not-for-profit business that is a sole
proprietorship, partnership, association or corporation domiciled in
Kansas, or any corporation, even if a wholly owned subsidiary of a foreign
corporation, that:
(A)(i) Does business primarily in Kansas or substantially all of its
production in Kansas;
(B)(ii) employs at least 30% of its employees in an integrated setting
who are individuals with disabilities and reside in Kansas;
(C)(iii) offers to contribute at least 75% of the premium cost for
individual health insurance coverage for each eligible employee. The
department of administration shall require a certification of these facts;
and
(D)(iv) does not employ individuals under a certificate issued by the
United States secretary of labor under 29 U.S.C. § 214(c);
(B) qualifies as a qualified vendor pursuant to K.S.A. 75-3317, and
amendments thereto, and also:
(i) Employs at least 30% of its employees in an integrated setting;
(ii) offers to contribute at least 75% of the premium cost for
individual health insurance coverage for each eligible employee or offers
a qualified company-sponsored insurance plan under the affordable care
act or pays the required subsidy to the internal revenue service for
employees who purchase insurance through the open market, if a
company-sponsored plan is not offered. If any such company is not
covered under the affordable care act and does not offer a company-
sponsored insurance plan, such company must offer assistance to the
employee to cover at least 75% of their health insurance costs through a
health savings account or other legal and appropriate methodology; and
(iii) does not employ individuals under a certificate issued by the
United States secretary of labor under 29 U.S.C. § 214(c); or
(C) a division within a Kansas not-for-profit organization that:
(i) Does business primarily in Kansas or substantially all of its
production in Kansas;
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(ii) within such division, employs in an integrated setting at least
30% of its employees who are individuals with disabilities and reside in
Kansas;
(iii) within such division, offers to contribute at least 75% of the
premium cost for individual health insurance coverage for each eligible
employee or offers a qualified company-sponsored insurance plan under
the affordable care act or pays the required subsidy to the internal revenue
service for employees who purchase insurance through the open market, if
a company-sponsored plan is not offered. If any such company is not
covered under the affordable care act and does not offer a company-
sponsored insurance plan, such company must offer assistance to the
employee to cover at least 75% of their health insurance costs through a
health savings account or other legal and appropriate methodology; and
(iv) within such division, does not employ individuals under a
certificate issued by the United States secretary of labor under 29 U.S.C. §
214(c).
(2) "individuals with disabilities" or "individual with a disability"
means any individual who:
(A) Is certified by the Kansas department for aging and disability
services or by the Kansas department for children and families, which
administers the rehabilitation services program or by a healthcare
provider determined by the secretary of revenue, that shall include, but is
not limited to, medical doctors, doctors of osteopathy, physician
assistants, nurse practitioners, physical therapists, occupational therapists
and optometrists who can substantiate an individual as having a physical
or mental impairment that constitutes a substantial barrier to employment;
and
(B) works a minimum number of hours per week for a certified
business necessary to qualify for health insurance coverage offered
pursuant to subsection (d)(1); and
(C) (i) is receiving services, has received services or is eligible to
receive services under a home and community based services program, as
defined by K.S.A. 39-7,100, and amendments thereto;
(ii) is employed by a charitable organization domiciled in the state of
Kansas and exempt from federal income taxation pursuant to section
501(c)(3) of the federal internal revenue code of 1986, as amended; or
(iii) is an individual with a disability pursuant to the disability
standards established by the social security administration as determined
by the Kansas disability determination services under the Kansas
department for children and families; and
(3) "qualified vendor" means an entity that:
(A) Is a "qualified vendor" pursuant to K.S.A. 75-3317, and
amendments thereto, or is a "certified business" that is also a nonprofit
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organization pursuant to K.S.A. 75-3740, and amendments thereto;
(B) pays minimum wage or above to all their employees in a manner
that meets the definition of "competitive employment" pursuant to K.S.A.
44-1136, and amendments thereto;
(C) meets the definition of employing all of their workers in an
"integrated setting" pursuant to K.S.A. 44-1136, and amendments thereto;
and
(D) offers a qualified company-sponsored insurance plan under the
affordable care act or pays the required subsidy to the internal revenue
service for employees who purchase insurance through the open market, if
a company-sponsored plan is not offered. If any such company is not
covered under the affordable care act, and does not offer a company-
sponsored insurance plan, such company must offer assistance to the
employee to cover at least 75% of their health insurance costs through a
health savings account or other legal and appropriate methodology.
(e)(f) The secretary of revenue shall report to the house committee on
taxation and the senate committee on assessment and taxation on or before
February 1, 2021, 2022, and 2023, concerning the implementation and
effectiveness of the credit provided in this section.
Sec. 2. K.S.A. 79-32,273 is hereby repealed.
Sec. 3. This act shall take effect and be in force from and after its
publication in the statute book.
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