Division of the Budget
Landon State Office Building Phone: (785) 296-2436
900 SW Jackson Street, Room 504 adam.c.proffitt@ks.gov
Topeka, KS 66612 http://budget.kansas.gov
Adam Proffitt, Director Laura Kelly, Governor
Division of the Budget
February 6, 2023
The Honorable Caryn Tyson, Chairperson
Senate Committee on Assessment and Taxation
300 SW 10th Avenue, Room 548-S
Topeka, Kansas 66612
Dear Senator Tyson:
SUBJECT: Fiscal Note for SB 126 by Senate Committee on Assessment and Taxation
In accordance with KSA 75-3715a, the following fiscal note concerning SB 126 is
respectfully submitted to your committee.
SB 126 would create a new income tax credit for certain residential solar and wind energy
property expenditures beginning in tax year 2023. The income tax credit would only be allowed
to be claimed by Kansas residents and would be equal to 100.0 percent of the amount claimed for
the federal Residential Clean Energy Credit. The tax credit would be non-refundable and could
be carried forward to future tax years until the full amount of the credit has been used.
Estimated State Fiscal Effect
FY 2023
SGF
FY 2023
All Funds
FY 2024
SGF
FY 2024
All Funds
Revenue -- -- ($40,500,000) ($40,500,000)
Expenditure -- -- $103,444 $103,444
FTE Pos. -- -- -- --
The Department of Revenue estimates that SB 126 would decrease State General Fund
revenues by $40.5 million in FY 2024, $42.5 million in FY 2025, and $44.7 million in FY 2026.
To formulate these estimates, the Department of Revenue reviewed data from the Internal Revenue
Service that indicates that federal credits allowed for the federal Residential Clean Energy Credit
for qualified solar electric property expenditures, qualified solar water heating expenditures, and
small wind energy property expenditures were about $3.5 billion in tax year 2020. Assuming
Kansas represents approximately 1.0 percent of the federal impact, Kansas individual income The Honorable Caryn Tyson, Chairperson
Page 2—SB 126
taxpayers are estimated to qualify for approximately $35.0 million in federal Residential Clean
Energy Credits in tax year 2020. Assuming 5.0 percent growth in this credit, the impact in tax
year 2023 or FY 2024 is approximately $40.5 million.
The Department indicates that the bill would require $103,444 from the State General Fund
in FY 2024 to implement the bill and to modify the automated tax system. The required
programming for this bill by itself would be performed by existing staff of the Department of
Revenue. In addition, if the combined effect of implementing this bill and other enacted legislation
exceeds the Department’s programming resources, or if the time for implementing the changes is
too short, additional expenditures for outside contract programmer services beyond the
Department’s current budget may be required. Any fiscal effect associated with SB 126 is not
reflected in The FY 2024 Governor’s Budget Report.
Sincerely,
Adam Proffitt
Director of the Budget
cc: Lynn Robinson, Department of Revenue
Peter Barstad, Kansas Corporation Commission