Session of 2023
HOUSE BILL No. 2411
By Committee on Taxation
2-13
AN ACT concerning income taxation; relating to withholding and
remittance of employee income taxes by employers; decreasing the
penalties for failing to timely remit; amending K.S.A. 79-32,107 and
repealing the existing section.
Be it enacted by the Legislature of the State of Kansas:
Section 1. K.S.A. 79-32,107 is hereby amended to read as follows:
79-32,107. (a) All penalties and interest prescribed by K.S.A. 79-3228, and
amendments thereto, for noncompliance with the income tax laws of
Kansas shall be applicable for noncompliance with the provisions of the
Kansas withholding and declaration of estimated tax act relating to
withholding tax which shall be enforced in the same manner as the Kansas
income tax act. A penalty at the same rate per annum prescribed by
subsection (b) of K.S.A. 79-2968(b), and amendments thereto, for interest
upon delinquent or unpaid taxes shall be applied and added to a taxpayer's
amount of underpayment of estimated tax due from the date the estimated
tax payment was due until the same is paid or until the 15
th
day of the
fourth month following the close of the taxable year for which such
estimated tax is a credit, whichever date is earlier, but such penalty shall
not be added if the total amount thereof does not exceed $1. For purposes
of this subsection, the amount of underpayment of estimated tax shall be
the excess of the amount of the installment which would be required to be
paid if the estimated tax were equal to 90% of the tax shown on the return
for the taxable year or, if no return was filed, 90% of the tax for such year,
over the amount, if any, of the installment paid on or before the last date
prescribed for payment. Amounts due from any employer on account of
withholding or from any taxpayer for estimated tax may be collected by
the director in the manner provided for the collection of state income tax in
K.S.A. 79-3235, and amendments thereto. For purposes of this subsection,
"underpayment of tax" means the difference between the amount of tax
actually paid and the amount of tax which would have been required to be
paid to avoid penalty pursuant to subsection (b) or (c).
(b) No penalty or interest shall be imposed upon any individual with
respect to any underpayment of any installment if the total amount of all
payments of estimated tax made on or before the last date prescribed for
the payment of such installment equals or exceeds the amount which
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would have been required to be paid on or before such date if the
estimated tax were whichever of the following is the least:
(1) The tax shown on the return of the individual for the preceding
taxable year, if a return showing a liability for tax was filed by the
individual for the preceding taxable year;
(2) zero if no return was required to be filed or if the tax liability on
the individual's return was less than $200 for the preceding taxable year;
(3) an amount equal to 66
2
/3%, in the case of individuals referred to
in subsection (b) of K.S.A. 79-32,102(b), and amendments thereto, and
90%, in the case of all other individuals, of the tax for the taxable year
computed by placing on an annualized basis, pursuant to rules and
regulations adopted by the secretary of revenue, the taxable income for the
months in the taxable year ending before the month in which the
installment is required to be made.
(c) No penalty or interest shall be imposed upon any corporation with
respect to any underpayment of any installment of estimated tax if the total
amount of all payments of estimated tax made on or before the last date
prescribed for the payment of such installment equals or exceeds the
amount which would have been required to be paid on or before such date
if the estimated tax were whichever of the following is the least:
(1) The tax shown on the return of the corporation for the preceding
taxable year, if a return showing a liability for tax was filed by the
corporation for the preceding taxable year, or zero if no return was
required to be filed, or if the tax liability on the corporation's return was
less than $500 for the preceding taxable year; or
(2) (A) an amount equal to 90% of the tax for the taxable year
computed by placing on an annualized basis the taxable income:
(i) For the first three months of the taxable year, in the case of the
installment required to be paid in the fourth month;
(ii) for the first three months or for the first five months of the taxable
year, in the case of the installment required to be paid in the sixth month;
(iii) for the first six months or for the first eight months of the taxable
year in the case of the installment required to be paid in the ninth month;
and
(iv) for the first nine months or for the first 11 months of the taxable
year, in the case of the installment required to be paid in the 12
th
month of
the taxable year.
(B) For purposes of this subsection paragraph (2), the taxable income
shall be placed on an annualized basis by:
(i) Multiplying by 12 the taxable income referred to in subsection (2)
(A), subparagraph (A); and
(ii) dividing the resulting amount by the number of months in the
taxable year (three, five, six, eight, nine, or 11, as the case may be)
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referred to in subsection (2)(A) subparagraph (A).
(d) If the employer, in violation of the provisions of this act, fails to
deduct and withhold under this chapter, and thereafter the tax against
which such withholding may be credited is paid, the amount otherwise
required to be deducted and withheld shall not be collected from the
employer. This subsection shall in no case relieve the employer from
liability for any penalties or additions to the tax otherwise applicable in
respect of such failure to deduct and withhold.
(e) Any person required to collect, truthfully account for, and pay
over any tax imposed by this act, who willfully fails to collect such tax, or
truthfully account for and pay over such tax, or willfully attempts in any
manner to evade or defeat any such tax or the payment thereof, shall in
addition to the other penalties of this section be liable to a penalty equal to
the total amount of the tax evaded, or not collected, or not accounted for
and paid over. As used in this section, "willfully" has the same meaning as
such term has for federal tax purposes in 26 U.S.C. § 6672.
(f) (1) In case of failure by any employer required by subsection (b)
of K.S.A. 79-3298(b), and amendments thereto, to remit any amount of
withheld taxes by the date prescribed therefor, unless it is shown that such
failure is due to reasonable cause and not due to willful neglect, there shall
be imposed upon such person a penalty of 15% of the amount of the
underpayment:
(A) 2% of the amount of the underpayment if remitted within one to
five days;
(B) 5% of the amount of the underpayment if remitted within six to 15
days;
(C) 10% of the amount of the underpayment if remitted after 15 days;
and
(D) 15% of the amount of the underpayment if remitted after 15 days
and the department has issued a notice to the person regarding the
underpayment but the amount of the underpayment was not remitted
within 10 days of issuance of the notice.
(2) For purposes of this subsection, the term "underpayment" means
the excess of the amount of the tax required to be withheld and remitted
over the amount, if any, remitted on or before the date prescribed therefor.
The failure to remit for any withholding period shall be deemed not to
continue beyond the last date prescribed for filing the annual return as
required by subsection (d) of K.S.A. 79-3298(d), and amendments thereto.
Penalty and interest as prescribed by K.S.A. 79-3228, and amendments
thereto, shall not begin to accrue under subsection (a) of this section on the
amount of any such underpayment until the due date of the annual return
for the calendar year in which such failure to remit occurs.
(g) Whenever the secretary or the secretary's designee determines that
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the failure of the taxpayer to comply with the provisions of subsections (a),
(e), or (f) of this section was due to reasonable causes, the secretary or the
secretary's designee may waive or reduce any of said such penalties and
may reduce the interest rate to the underpayment rate prescribed and
determined for the applicable period under section 6621 of the federal
internal revenue code as in effect on January 1, 1994, upon making a
record of the reasons therefor.
Sec. 2. K.S.A. 79-32,107 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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