House Substitute for SENATE BILL No. 37
AN ACT concerning taxation; relating to income tax; modifying tax rates for individuals;
eliminating the income limit to qualify for a subtraction modification for social
security income; increasing the Kansas standard deduction and the Kansas personal
exemption; relating to privilege tax; decreasing the normal tax rate; relating to
property tax; increasing the extent of exemption for residential property from the
statewide school levy; decreasing the rate of ad valorem tax imposed by a school
district; abolishing the local ad valorem tax reduction fund and the county and city
revenue sharing fund and providing for certain transfers to the state school district
finance fund; relating to sales and compensating use tax; reducing the state rate of tax
on sales of food and food ingredients; modifying the percent credited to the state
highway fund from revenue collected; amending K.S.A. 65-163j, 65-3306, 65-3327,
75-2556, 79-1107, 79-1108 and 79-1479 and K.S.A. 2023 Supp. 72-5142, 74-8768,
79-201x, 79-2988, 79-32,110, 79-32,117, 79-32,119, 79-32,121, 79-3603, 79-3603d,
79-3620, 79-3703 and 79-3710 and repealing the existing sections; also repealing
K.S.A. 19-2694, 79-2960, 79-2961, 79-2962, 79-2965, 79-2966 and 79-2967 and
K.S.A. 2023 Supp. 79-2959 and 79-2964.
Be it enacted by the Legislature of the State of Kansas:
New Section 1. On July 1, 2024, the director of accounts and
reports shall transfer all moneys in the local ad valorem tax reduction
fund to the state general fund. On July 1, 2024, all liabilities of the local
ad valorem tax reduction fund are hereby transferred to and imposed on
the state general fund, and the local ad valorem tax reduction fund is
hereby abolished.
New Sec. 2. On July 1, 2024, the director of accounts and reports
shall transfer all moneys in the county and city revenue sharing fund to
the state general fund. On July 1, 2024, all liabilities of the county and
city revenue sharing fund are hereby transferred to and imposed on the
state general fund, and the county and city revenue sharing fund is
hereby abolished.
New Sec. 3. On August 15, 2024, and each August 15 thereafter,
the director of the budget, in consultation with the director of property
valuation, shall certify to the director of accounts and reports if the tax
levied pursuant to K.S.A. 72-5142, and amendments thereto, is
decreased from 20 mills or the exemption provided by K.S.A. 79-201x,
and amendments thereto, is increased from $42,049 for any tax year.
The director of the budget shall certify to the director of accounts and
reports and shall transfer a copy of such certification to the director of
legislative research, the amount of revenue that the decrease in property
tax would have generated for the tax year if such tax was levied
pursuant to K.S.A. 72-5142, and amendments thereto, at the rate of 20
mills and the difference in the amount of revenue that the increase in
the exemption provided by K.S.A. 79-201x, and amendments thereto,
would have generated for the tax year if the exemption amount was
$42,049. Upon receipt of such certification, or as soon thereafter as
moneys are available, the director of accounts and reports shall transfer
such certified amount from the state general fund to the state school
district finance fund of the department of education.
Sec. 4. On and after July 1, 2024, K.S.A. 65-163j is hereby
amended to read as follows: 65-163j. (a) The dedicated source of
revenue for repayment of a loan to a municipality may include service
charges, connection fees, special assessments, property taxes, grants or
any other source of revenue lawfully available to the municipality for
such purpose. In order to ensure repayment by municipalities of the
amounts of loans provided under this act, the secretary, after
consultation with the governing body of any municipality which that
receives a loan, may adopt charges to be levied against individuals and
entities served by the project. Any such charges shall remain in effect
until the total amount of the loan, and any interest thereon, has been
repaid. The charges shall, insofar as is practicable, be equitably
assessed and may be in the form of a surcharge to the existing charges
of the municipality. The governing body of any municipality which
that receives a loan under this act shall collect any charges established House Substitute for SENATE BILL No. 37—page 2
by the secretary and shall pay the moneys collected therefrom to the
secretary in accordance with procedures established by the secretary.
(b) Upon the failure of a municipality to meet the repayment terms
and conditions of the agreement, the secretary may order the treasurer
of the county in which the municipality is located to pay to the
secretary such portion of the municipality's share of the local ad
valorem tax reduction fund as may be necessary to meet the terms of
the agreement, notwithstanding the provisions of K.S.A. 79-2960 and
79-2961, and amendments thereto. Upon the issuance of such an order,
the municipality shall not be required to make the tax levy reductions
otherwise required by K.S.A. 79-2960 and 79-2961, and amendments
thereto.
(c) Municipalities which that are provided with loans under this
act shall maintain project accounts in accordance with generally
accepted government accounting standards.
(d)(c) Any loans received by a municipality under the provisions
of this act shall be construed to be bonds for the purposes of K.S.A. 10-
1116 and 79-5028, and amendments thereto, and the amount of such
loans shall not be included within any limitation on the bonded
indebtedness of the municipality.
Sec. 5. On and after July 1, 2024, K.S.A. 65-3306 is hereby
amended to read as follows: 65-3306. The secretary's annual request for
appropriations to the water pollution control account shall be based on
an estimate of the fiscal needs for the ensuing budget year, less any
amounts received by the secretary from any public or private grants or
contributions and moneys in such account shall be used solely for the
purposes provided for by this act. Moneys allocated to a municipality
shall be encumbered as an expenditure of this account upon the formal
letting of a contract for the improvement notwithstanding the date on
which when actual payment is made of the state financial assistance.
Any municipality may contribute moneys to the state water pollution
control account. If there are no uncommitted or unencumbered moneys
in the water pollution control account, any municipality applying for
any water pollution control project as defined in K.S.A. 65-3302, and
amendments thereto, shall as a condition of such application certify in
writing to the secretary that a contribution in the amount of twenty-five
percent (25%) of the eligible cost of such project will be made to the
water pollution control account by such municipality prior to formal
letting of a construction contract. Upon receipt by the secretary, each
such contribution shall be retained in a subaccount of the water
pollution control account for use solely in the project for which the
municipality has made application.
Notwithstanding the provisions of K.S.A. 79-2960 and 79-2961, any
municipality applying for such a water pollution control project may
make such contribution from all or such part of its share of the local ad
valorem tax reduction fund as may be necessary for such purpose, and
to the extent such fund is pledged and used for such purpose the
municipality shall not be required to make the tax levy reductions
otherwise required by K.S.A. 79-2960 and 79-2961. Taxes levied by
any municipality by reason of its failure to make such reduction in its
levies shall not be subject to or be considered in computing the
aggregate limitation upon the levy of taxes by such municipality under
the provisions of K.S.A. 79-5003.
Sec. 6. On and after July 1, 2024, K.S.A. 65-3327 is hereby
amended to read as follows: 65-3327. (a) The dedicated source of
revenue for repayment of the loans may include service charges,
connection fees, special assessments, property taxes, grants or any
other source of revenue lawfully available to the municipality for such
purpose. In order to ensure repayment by municipalities of the amounts House Substitute for SENATE BILL No. 37—page 3
of loans provided under K.S.A. 65-3321 through 65-3329, and
amendments thereto, the secretary, after consultation with the
governing body of any municipality which receives a loan, may adopt
charges to be levied against users of the project. Any such charges shall
remain in effect until the total amount of the loan, and any interest
thereon, has been repaid. The charges shall, insofar as is practicable, be
equitably assessed and may be in the form of a surcharge to the existing
charges of the municipality. The governing body of any municipality
which receives a loan under K.S.A. 65-3321 through 65-3329, and
amendments thereto, shall collect any charges established by the
secretary and shall pay the moneys collected therefrom to the secretary
in accordance with procedures established by the secretary.
(b) Upon the failure of a municipality to meet the repayment terms
and conditions of the agreement, the secretary may order the treasurer
of the county in which the municipality is located to pay to the
secretary such portion of the municipality's share of the local ad
valorem tax reduction fund as may be necessary to meet the terms of
the agreement, notwithstanding the provisions of K.S.A. 79-2960 and
79-2961 and amendments thereto. Upon the issuance of such an order,
the municipality shall not be required to make the tax levy reductions
otherwise required by K.S.A. 79-2960 and 79-2961 and amendments
thereto.
(c) Municipalities which that are provided with loans under
K.S.A. 65-3321 through 65-3329, and amendments thereto, shall
maintain project accounts in accordance with generally accepted
government accounting standards.
(d)(c) Municipalities which that receive a grant and an allowance
under the federal act with respect to project costs for which a loan was
provided under K.S.A. 65-3321 through 65-3329, and amendments
thereto, shall promptly repay such loan to the extent of the allowance
received under the federal act.
(e)(d) Any loans received by a municipality under the provisions
of K.S.A. 65-3321 through 65-3329, and amendments thereto, shall be
construed to be bonds for the purposes of K.S.A. 10-1116 and 79-5028,
and amendments thereto, and the amount of such loans shall not be
included within any limitation on the bonded indebtedness of the
municipality.
Sec. 7. On and after July 1, 2024, K.S.A. 2023 Supp. 72-5142 is
hereby amended to read as follows: 72-5142. (a) The board of
education of each school district shall levy an ad valorem tax upon the
taxable tangible property of the school district in the school years
specified in subsection (b) for the purpose of:
(1) Financing that portion of the school district's general fund
budget that is not financed from any other source provided by law;
(2) paying a portion of the costs of operating and maintaining
public schools in partial fulfillment of the constitutional obligation of
the legislature to finance the educational interests of the state; and
(3) with respect to any redevelopment school district established
prior to July 1, 1997, pursuant to K.S.A. 12-1771, and amendments
thereto, paying a portion of the principal and interest on bonds issued
by cities under authority of K.S.A. 12-1774, and amendments thereto,
for the financing of redevelopment projects upon property located
within the school district.
(b) The tax required under subsection (a) shall be levied at a rate
of 20 19.5 mills in the school years 2023-2024 and 2024-2025 and
2025-2026.
(c) The proceeds from the tax levied by a district under authority
of this section, except the proceeds of such tax levied for the purpose
described in subsection (a)(3), shall be remitted to the state treasurer in House Substitute for SENATE BILL No. 37—page 4
accordance with the provisions of K.S.A. 75-4215, and amendments
thereto. Upon receipt of each such remittance, the state treasurer shall
deposit the entire amount in the state treasury to the credit of the state
school district finance fund.
(d) No school district shall proceed under K.S.A. 79-1964, 79-
1964a or 79-1964b, and amendments thereto.
Sec. 8. On and after July 1, 2024, K.S.A. 2023 Supp. 74-8768 is
hereby amended to read as follows: 74-8768. (a) There is hereby
created the expanded lottery act revenues fund in the state treasury. All
expenditures and transfers from such fund shall be made in accordance
with appropriation acts. All moneys credited to such fund shall be
expended or transferred only for the purposes of reduction of state debt,
state infrastructure improvements, the university engineering initiative
act, reduction of local ad valorem tax in the same manner as provided
for allocation of amounts in the local ad valorem tax reduction fund and
reduction of the unfunded actuarial liability of the system attributable
to the state of Kansas and participating employers under K.S.A. 74-
4931, and amendments thereto, by the Kansas public employees
retirement system.
(b) On July 1, 2021, July 1, 2022, July 1, 2023, July 1, 2024, July
1, 2025, July 1, 2026, July 1, 2027, July 1, 2028, July 1, 2029, July 1,
2030, and July 1, 2031, or as soon thereafter such date as moneys are
available, the first $10,500,000 credited to the expanded lottery act
revenues fund shall be transferred by the director of accounts and
reports from the expanded lottery act revenues fund in one or more
substantially equal amounts, to each of the following: The Kan-grow
engineering fund – KU, Kan-grow engineering fund – KSU and Kan-
grow engineering fund – WSU. Each such special revenue fund shall
receive $3,500,000 annually in each of such years. Commencing in
fiscal year 2014, after such transfer has been made, 50% of the
remaining moneys credited to the fund shall be transferred on a
quarterly basis by the director of accounts and reports from the fund to
the Kansas public employees retirement system fund to be applied to
reduce the unfunded actuarial liability of the system attributable to the
state of Kansas and participating employers under K.S.A. 74-4931 et
seq., and amendments thereto, until the system as a whole attains an
80% funding ratio as certified by the board of trustees of the Kansas
public employees retirement system.
Sec. 9. On and after July 1, 2024, K.S.A. 75-2556 is hereby
amended to read as follows: 75-2556. (a) The state librarian shall
determine the amount of the grant-in-aid each eligible local public
library is to receive based on the latest population census figures as
certified by the division of the budget.
(b) Except as provided by subsection (d), no local public library
shall be eligible for any state grants-in-aid if the total amount of the
following paragraphs is less than the total amount produced from such
sources for the same library for the previous year, based on the
information contained in the official annual budgets of municipalities
that are filed with the division of accounts and reports in accordance
with K.S.A. 79-2930, and amendments thereto:
(1) The amount produced by the local ad valorem tax levies for
the current year expenses for such library;
(2) the amount of moneys received from the local ad valorem tax
reduction fund for current year expenses for such library;
(3) the amount of moneys received from taxes levied upon motor
vehicles under the provisions of K.S.A. 79-5101 et seq., and
amendments thereto, for current year expenses for such library; and
(4)(3) the amount of moneys received in the current year from
collections of unpaid local ad valorem tax levies for prior year expenses House Substitute for SENATE BILL No. 37—page 5
for such library.
(c) Local public library districts in which the assessed valuation
decreases shall remain eligible for state grants-in-aid so long as the ad
valorem tax mill rate for the support of such library has not been
reduced below the mill rate imposed for such purpose for the previous
year.
(d) If a local public library fails to qualify for eligibility for any
state grants-in-aid under subsection (b), the state librarian shall have the
power to continue the eligibility of a local public library for any state
grants-in-aid if the state librarian, after evaluation of all the
circumstances, determines that the legislative intent for maintenance of
local tax levy support for the on-going operations of the library is being
met by the library district.
(e) The distribution so determined shall be apportioned and paid
on February 15 of each year.
Sec. 10. On and after July 1, 2024, K.S.A. 2023 Supp. 79-201x is
hereby amended to read as follows: 79-201x. (a) For taxable year 2022
2024, and all taxable years thereafter, the following described property,
to the extent herein specified, shall be and is hereby exempt from the
property tax levied pursuant to the provisions of K.S.A. 72-5142, and
amendments thereto: Property used for residential purposes to the
extent of $40,000 $100,000 of its appraised valuation.
(b) For taxable year 2023, and all taxable years thereafter, the
dollar amount of the extent of appraised valuation that is exempt
pursuant to subsection (a) shall be adjusted to reflect the average
percentage change in statewide residential valuation of all residential
real property for the preceding 10 years. Such average percentage
change shall not be less than zero. The director of property valuation
shall calculate the average percentage change for purposes of this
annual adjustment and calculate the dollar amount of the extent of
appraised valuation that is exempt pursuant to this section each year.
Sec. 11. On and after July 1, 2024, K.S.A. 79-1107 is hereby
amended to read as follows: 79-1107. (a) Every national banking
association and state bank located or doing business within the state
shall pay to the state for the privilege of doing business within the state
a tax according to or measured by its net income for the next preceding
taxable year to be computed as provided in this act. Such tax shall
consist of a normal tax and a surtax and shall be computed as follows:
(a)(1) For tax year 2024, and all tax years thereafter, the normal
tax shall be an amount equal to 2
1
/4% 1.94% of such net income; and
(b)(2) the surtax shall be an amount equal to 2
1
/8% 2.125% of
such net income in excess of $25,000.
(b) The tax levied shall be in lieu of ad valorem taxes which might
otherwise be imposed by the state or political subdivisions thereof upon
shares of capital stock or the intangible assets of national banking
associations and state banks.
Sec. 12. On and after July 1, 2024, K.S.A. 79-1108 is hereby
amended to read as follows: 79-1108. (a) Every trust company and
savings and loan association located or doing business within the state
shall pay to the state for the privilege of doing business within the state
a tax according to or measured by its net income for the next preceding
taxable year to be computed as provided in this act. Such tax shall
consist of a normal tax and a surtax and shall be computed as follows:
(a)(1) For tax year 2024, and all tax years thereafter, the normal
tax on every trust company and savings and loan association shall be an
amount equal to 2
1
/4% 1.93% of such net income; and
(b)(2) the surtax on every trust company and savings and loan
association shall be an amount equal to 2
1
/4% 2.25% of such net
income in excess of $25,000. House Substitute for SENATE BILL No. 37—page 6
(b) The tax levied shall be in lieu of ad valorem taxes which might
otherwise be imposed by the state or political subdivision thereof upon
shares of capital stock or other intangible assets of trust companies and
savings and loan associations.
Sec. 13. On and after July 1, 2024, K.S.A. 79-1479 is hereby
amended to read as follows: 79-1479. (a) On or before January 15,
1992, and quarterly thereafter, the county or district appraiser shall
submit to the director of property valuation a progress report indicating
actions taken during the preceding quarter calendar year to implement
the appraisal of property in the county or district. Whenever the
director of property valuation shall determine that any county has
failed, neglected or refused to properly provide for the appraisal of
property or the updating of the appraisals on an annual basis in
substantial compliance with the provisions of law and the guidelines
and timetables prescribed by the director, the director shall file with the
state board of tax appeals a complaint stating the facts upon which the
director has made the determination of noncompliance as provided by
K.S.A. 79-1413a, and amendments thereto. If, as a result of such
proceeding, the state board of tax appeals finds that the county is not in
substantial compliance with the provisions of law and the guidelines
and timetables of the director of property valuation providing for the
appraisal of all property in the county or the updating of the appraisals
on an annual basis, it shall order the immediate assumption of the
duties of the office of county appraiser by the director of the division of
property valuation until such time as the director of property valuation
determines that the county is in substantial compliance with the
provisions of law. In addition, the board shall order the state treasurer
to withhold all or a portion of the county's entitlement to moneys from
either or both of the local ad valorem tax reduction fund and the city
and county revenue sharing fund for the year following the year in
which the order is issued. Upon service of any such order on the board
of county commissioners, the appraiser shall immediately deliver to the
director of property valuation, or the director's designee, all books,
records and papers pertaining to the appraiser's office.
Any county for which the director of the division of property
valuation is ordered by the state board of tax appeals to assume the
responsibility and duties of the office of county appraiser shall
reimburse the state for the actual costs incurred by the director of the
division of property valuation in the assumption and carrying out of
such responsibility and duties, including any contracting costs in the
event it is necessary for the director of property valuation to contract
with private appraisal firms to carry out such responsibilities and
duties.
(b) On or before June 1 of each year, the director of property
valuation shall review the appraisal of property in each county or
district to determine if property within the county or district is being
appraised or valued in accordance with the requirements of law. If the
director determines the property in any county or district is not being
appraised in accordance with the requirements of law, the director of
property valuation shall notify the county or district appraiser and the
board of county commissioners of any county or counties affected that
the county has 30 days within which to submit to the director a plan for
bringing the appraisal of property within the county into compliance.
If a plan is submitted and approved by the director the county or
district shall proceed to implement the plan as submitted. The director
shall continue to monitor the program to insure that the plan is
implemented as submitted. If no plan is submitted or if the director
does not approve the plan, the director shall petition the state board of
tax appeals for a review of the plan or, if no plan is submitted, for House Substitute for SENATE BILL No. 37—page 7
authority for the division of property valuation to assume control of the
appraisal program of the county and to proceed to bring the same into
compliance with the requirements of law.
If the state board of tax appeals approves the plan, the county or
district appraiser shall proceed to implement the plan as submitted. If
no plan has been submitted or the plan submitted is not approved, the
board shall fix a time within which the county may submit a plan or an
amended plan for approval. If no plan is submitted and approved within
the time prescribed by the board, the board shall order the division of
property valuation to assume control of the appraisal program of the
county and shall certify its order to the state treasurer who shall
withhold distributions of the county's share of moneys from the county
and city revenue sharing fund and the local ad valorem tax reduction
fund and credit the same to the general fund of the state for the year
following the year in which the board's order is made. The director of
property valuation shall certify the amount of the cost incurred by the
division in bringing the program in compliance to the state board of tax
appeals. The board shall order the county commissioners to reimburse
the state for such costs.
(c) The state board of tax appeals shall within 60 days after the
publication of the Kansas assessment/sales ratio study review such
publication to determine county compliance with K.S.A. 79-1439, and
amendments thereto. If in the determination of the board one or more
counties are not in substantial compliance and the director of property
valuation has not acted under subsection (b), the board shall order the
director of property valuation to take such corrective action as is
necessary or to show cause for noncompliance.
Sec. 14. On and after July 1, 2024, K.S.A. 2023 Supp. 79-2988 is
hereby amended to read as follows: 79-2988. (a) On or before June 15
each year, the county clerk shall calculate the revenue neutral rate for
each taxing subdivision and include such revenue neutral rate on the
notice of the estimated assessed valuation provided to each taxing
subdivision for budget purposes. The director of accounts and reports
shall modify the prescribed budget information form to show the
revenue neutral rate.
(b) No tax rate in excess of the revenue neutral rate shall be levied
by the governing body of any taxing subdivision unless a resolution or
ordinance has been approved by the governing body according to the
following procedure:
(1) At least 10 days in advance of the public hearing, the
governing body shall publish notice of its proposed intent to exceed the
revenue neutral rate by publishing notice:
(A) On the website of the governing body, if the governing body
maintains a website; and
(B) in a weekly or daily newspaper of the county having a general
circulation therein. The notice shall include, but not be limited to, its
proposed tax rate, its revenue neutral rate and the date, time and
location of the public hearing.
(2) On or before July 20, the governing body shall notify the
county clerk of its proposed intent to exceed the revenue neutral rate
and provide the date, time and location of the public hearing and its
proposed tax rate. For all tax years commencing after December 31,
2021, the county clerk shall notify each taxpayer with property in the
taxing subdivision, by mail directed to the taxpayer's last known
address, of the proposed intent to exceed the revenue neutral rate at
least 10 days in advance of the public hearing. Alternatively, the county
clerk may transmit the notice to the taxpayer by electronic means at
least 10 days in advance of the public hearing, if such taxpayer and
county clerk have consented in writing to service by electronic means. House Substitute for SENATE BILL No. 37—page 8
The county clerk shall consolidate the required information for all
taxing subdivisions relevant to the taxpayer's property on one notice.
The notice shall be in a format prescribed by the director of accounts
and reports. The notice shall include, but not be limited to:
(A) The revenue neutral rate of each taxing subdivision relevant to
the taxpayer's property;
(B) the proposed property tax revenue needed to fund the
proposed budget of the taxing subdivision, if the taxing subdivision
notified the county clerk of its proposed intent to exceed its revenue
neutral rate;
(C) the proposed tax rate based upon the proposed budget and the
current year's total assessed valuation of the taxing subdivision, if the
taxing subdivision notified the county clerk of its proposed intent to
exceed its revenue neutral rate;
(D) the percentage by which the proposed tax rate exceeds the
revenue neutral rate;
(E) the tax rate and property tax of each taxing subdivision on the
taxpayer's property from the previous year's tax statement;
(F) the appraised value and assessed value of the taxpayer's
property for the current year;
(G) the estimates of the tax for the current tax year on the
taxpayer's property based on the revenue neutral rate of each taxing
subdivision and any proposed tax rates that exceed the revenue neutral
rates;
(H) the difference between the estimates of tax based on the
proposed tax rate and the revenue neutral rate on the taxpayer's
property described in subparagraph (G) for any taxing subdivision that
has a proposed tax rate that exceeds its revenue neutral rate; and
(I) the date, time and location of the public hearing of the taxing
subdivision, if the taxing subdivision notified the county clerk of its
proposed intent to exceed its revenue neutral rate.
Although the state of Kansas is not a taxing subdivision for
purposes of this section, the notice shall include a statement of the
statutory mill levies imposed by the state and the estimate of the tax for
the current year on the taxpayer's property based on such levies.
(3) The public hearing to consider exceeding the revenue neutral
rate shall be held not sooner than August 20 and not later than
September 20. The governing body shall provide interested taxpayers
desiring to be heard an opportunity to present oral testimony within
reasonable time limits and without unreasonable restriction on the
number of individuals allowed to make public comment. The public
hearing may be conducted in conjunction with the proposed budget
hearing pursuant to K.S.A. 79-2929, and amendments thereto, if the
governing body otherwise complies with all requirements of this
section. Nothing in this section shall be construed to prohibit additional
public hearings that provide additional opportunities to present
testimony or public comment prior to the public hearing required by
this section.
(4) A majority vote of the governing body, by the adoption of a
resolution or ordinance to approve exceeding the revenue neutral rate,
shall be required prior to adoption of a proposed budget that will result
in a tax rate in excess of the revenue neutral rate. Such vote of the
governing body shall be conducted at the public hearing after the
governing body has heard from interested taxpayers and shall be a roll
call vote. If the governing body approves exceeding the revenue neutral
rate, the governing body shall not adopt a budget that results in a tax
rate in excess of its proposed tax rate as stated in the notice provided
pursuant to this section. A copy of the resolution or ordinance to
approve exceeding the revenue neutral rate and a certified copy of any House Substitute for SENATE BILL No. 37—page 9
roll call vote reporting, at a minimum, the name and vote of each
member of the governing body related to exceeding the revenue neutral
rate, whether approved or not, shall be included with the adopted
budget, budget certificate and other budget forms filed with the county
clerk and the director of accounts and reports and shall be published on
the website of the department of administration.
(c) (1) Any governing body subject to the provisions of this
section that does not comply with subsection (b) shall refund to
taxpayers any property taxes over-collected based on the amount of the
levy that was in excess of the revenue neutral rate.
(2) Any taxpayer of the taxing subdivision that is the subject of
the complaint or such taxpayer's duly authorized representative may
file a complaint with the state board of tax appeals by filing a written
complaint, on a form prescribed by the board, that contains the facts
that the complaining party believes show that a governing body of a
taxing subdivision did not comply with the provisions of subsection (b)
and that a reduction or refund of taxes is appropriate. The complaining
party shall provide a copy of such complaint to the governing body of
the taxing subdivision making the levy that is the subject of the
complaint. Notwithstanding K.S.A. 74-2438a, and amendments thereto,
no filing fee shall be charged by the executive director of the state
board of tax appeals for a complaint filed pursuant to this paragraph.
The governing body of the taxing subdivision making the levy that is
the subject of the complaint shall be a party to the proceeding. Notice
of any summary proceeding or hearing shall be served upon such
governing body, the county clerk, the director of accounts and reports
and the complaining party. It shall be the duty of the governing body to
initiate the production of evidence to demonstrate, by a preponderance
of the evidence, the validity of such levy. If upon a summary
proceeding or hearing, it shall be made to appear to the satisfaction of
the board that the governing body of the taxing subdivision did not
comply with subsection (b), the state board of tax appeals shall order
such governing body to refund to taxpayers the amount of property
taxes over collected or reduce the taxes levied, if uncollected. The
provisions of this paragraph shall not be construed as prohibiting any
other remedies available under the law.
(d) On and after January 1, 2022, in the event that the 20 mills tax
levied by a school district pursuant to K.S.A. 72-5142, and
amendments thereto, increases the property tax revenue generated for
the purpose of calculating the revenue neutral rate from the previous
tax year and such amount of increase in revenue generated from the 20
mills such tax levied is the only reason that the school district would
exceed the total property tax revenue from the prior year, the school
district shall be deemed to not have exceeded the revenue neutral rate
in levying a tax rate in excess of the revenue neutral rate to take into
account the increase in revenue from only the 20 mills such tax levied.
(e) (1) Notwithstanding any other provision of law to the contrary,
if the governing body of a taxing subdivision must conduct a public
hearing to approve exceeding the revenue neutral rate under this
section, the governing body of the taxing subdivision shall certify, on or
before October 1, to the proper county clerk the amount of ad valorem
tax to be levied.
(2) If a governing body of a taxing subdivision did not comply
with the provisions of subsection (b) and certifies to the county clerk an
amount of ad valorem tax to be levied that would result in a tax rate in
excess of its revenue neutral rate, the county clerk shall reduce the ad
valorem tax to be levied to the amount resulting from such taxing
subdivision's revenue neutral rate.
(f) As used in this section: House Substitute for SENATE BILL No. 37—page 10
(1) "Taxing subdivision" means any political subdivision of the
state that levies an ad valorem tax on property.
(2) "Revenue neutral rate" means the tax rate for the current tax
year that would generate the same property tax revenue as levied the
previous tax year using the current tax year's total assessed valuation.
To calculate the revenue neutral rate, the county clerk shall divide the
property tax revenue for such taxing subdivision levied for the previous
tax year by the total of all taxable assessed valuation in such taxing
subdivision for the current tax year, and then multiply the quotient by
1,000 to express the rate in mills. The revenue neutral rate shall be
expressed to the third decimal place.
(g) In the event that a county clerk incurred costs of printing and
postage that were not reimbursed pursuant to K.S.A. 2023 Supp. 79-
2989, and amendments thereto, such county clerk may seek
reimbursement from all taxing subdivisions required to send the notice.
Such costs shall be shared proportionately by all taxing subdivisions
that were included on the same notice based on the total property tax
levied by each taxing subdivision. Payment of such costs shall be due
to the county clerk by December 31.
(h) The department of administration or the director of accounts
and reports shall make copies of adopted budgets, budget certificates,
other budget documents and revenue neutral rate documents available
to the public on the department of administration's website on a
permanently accessible web page that may be accessed via a
conspicuous link to that web page placed on the front page of the
department's website. The department of administration or the director
of accounts and reports shall also make the following information for
each tax year available on such website:
(1) A list of taxing subdivisions by county;
(2) whether each taxing subdivision conducted a hearing to
consider exceeding its revenue neutral rate;
(3) the revenue neutral rate of each taxing subdivision;
(4) the tax rate resulting from the adopted budget of each taxing
subdivision; and
(5) the percent change between the revenue neutral rate and the
tax rate for each taxing subdivision.
Sec. 15. On and after July 1, 2024, K.S.A. 2023 Supp. 79-32,110
is hereby amended to read as follows: 79-32,110. (a) Resident
individuals. Except as otherwise provided by K.S.A. 79-3220(a), and
amendments thereto, a tax is hereby imposed upon the Kansas taxable
income of every resident individual, which tax shall be computed in
accordance with the following tax schedules:
(1) Married individuals filing joint returns.
(A) For tax year 2012:
If the taxable income is: The tax is:
Not over $30,000 3.5% of Kansas taxable income
Over $30,000 but not over $60,000 $1,050 plus 6.25% of excess
over $30,000
Over $60,000 $2,925 plus 6.45% of excess
over $60,000
(B) For tax year 2013:
If the taxable income is: The tax is:
Not over $30,000 3.0% of Kansas taxable income
Over $30,000 $900 plus 4.9% of excess over
$30,000
(C) For tax year 2014:
If the taxable income is: The tax is:
Not over $30,000 2.7% of Kansas taxable income
Over $30,000 $810 plus 4.8% of excess over House Substitute for SENATE BILL No. 37—page 11
$30,000
(D) For tax years 2015 and 2016:
If the taxable income is: The tax is:
Not over $30,000 2.7% of Kansas taxable income
Over $30,000 $810 plus 4.6% of excess over
$30,000
(E) For tax year 2017:
If the taxable income is: The tax is:
Not over $30,000 2.9% of Kansas taxable income
Over $30,000 but not over $60,000 $870 plus 4.9% of excess over
$30,000
Over $60,000 $2,340 plus 5.2% of excess over
$60,000
(F) For tax year years 2018, and all tax years thereafter through
2023:
If the taxable income is: The tax is:
Not over $30,000..................................3.1% of Kansas taxable income
Over $30,000 but not over $60,000......$930 plus 5.25% of excess
over $30,000
Over $60,000........................................$2,505 plus 5.7% of excess
over $60,000
(B) For tax year 2024, and all tax years thereafter:
If the taxable income is: The tax is:
Not over $46,000…..............................5.2% of Kansas taxable income
Over $46,000........................................$2,392 plus 5.57% of excess
over $46,000
(2) All other individuals.
(A) For tax year 2012:
If the taxable income is: The tax is:
Not over $15,000 3.5% of Kansas taxable income
Over $15,000 but not over $30,000$525 plus 6.25% of excess
over $15,000
Over $30,000 $1,462.50 plus 6.45% of excess
over $30,000
(B) For tax year 2013:
If the taxable income is: The tax is:
Not over $15,000 3.0% of Kansas taxable income
Over $15,000 $450 plus 4.9% of excess over
$15,000
(C) For tax year 2014:
If the taxable income is: The tax is:
Not over $15,000 2.7% of Kansas taxable income
Over $15,000 $405 plus 4.8% of excess over
$15,000
(D) For tax years 2015 and 2016:
If the taxable income is: The tax is:
Not over $15,000 2.7% of Kansas taxable income
Over $15,000 $405 plus 4.6% of excess over
$15,000
(E) For tax year 2017:
If the taxable income is: The tax is:
Not over $15,000 2.9% of Kansas taxable income
Over $15,000 but not over $30,000$435 plus 4.9% of excess over
$15,000
Over $30,000 $1,170 plus 5.2% of excess over
$30,000
(F) For tax year years 2018, and all tax years thereafter through
2023:
If the taxable income is:The tax is: House Substitute for SENATE BILL No. 37—page 12
Not over $15,000…............................3.1% of Kansas taxable income
Over $15,000 but not over $30,000....$465 plus 5.25% of excess
over $15,000
Over $30,000.......................................$1,252.50 plus 5.7% of excess
over $30,000
(B) For tax year 2024, and all tax years thereafter:
If the taxable income is: The tax is:
Not over $23,000…..............................5.2% of Kansas taxable income
Over $23,000........................................$1,196 plus 5.57% of excess
over $23,000
(b) Nonresident individuals. A tax is hereby imposed upon the
Kansas taxable income of every nonresident individual, which tax shall
be an amount equal to the tax computed under subsection (a) as if the
nonresident were a resident multiplied by the ratio of modified Kansas
source income to Kansas adjusted gross income.
(c) Corporations. A tax is hereby imposed upon the Kansas
taxable income of every corporation doing business within this state or
deriving income from sources within this state. Such tax shall consist of
a normal tax and a surtax and shall be computed as follows unless
otherwise modified pursuant to K.S.A. 2023 Supp. 74-50,321, and
amendments thereto:
(1) The normal tax shall be in an amount equal to 4% of the
Kansas taxable income of such corporation; and
(2) the surtax shall be in an amount equal to 3% of the Kansas
taxable income of such corporation in excess of $50,000.
(d) Fiduciaries. A tax is hereby imposed upon the Kansas taxable
income of estates and trusts at the rates provided in subsection (a)(2)
hereof.
(e) Notwithstanding the provisions of subsections (a) and (b): (1)
For tax years 2016 and 2017, married individuals filing joint returns
with taxable income of $12,500 or less, and all other individuals with
taxable income of $5,000 or less, shall have a tax liability of zero; and
(2), for tax year years 2018, and all tax years thereafter through 2023,
married individuals filing joint returns with taxable income of $5,000
or less, and all other individuals with taxable income of $2,500 or less,
shall have a tax liability of zero.
(f) No taxpayer shall be assessed penalties and interest arising
from the underpayment of taxes due to changes to the rates in
subsection (a) that became law on July 1, 2017, so long as such
underpayment is rectified on or before April 17, 2018.
Sec. 16. On and after July 1, 2024, K.S.A. 2023 Supp. 79-32,117
is hereby amended to read as follows: 79-32,117. (a) The Kansas
adjusted gross income of an individual means such individual's federal
adjusted gross income for the taxable year, with the modifications
specified in this section.
(b) There shall be added to federal adjusted gross income:
(i) Interest income less any related expenses directly incurred in
the purchase of state or political subdivision obligations, to the extent
that the same is not included in federal adjusted gross income, on
obligations of any state or political subdivision thereof, but to the
extent that interest income on obligations of this state or a political
subdivision thereof issued prior to January 1, 1988, is specifically
exempt from income tax under the laws of this state authorizing the
issuance of such obligations, it shall be excluded from computation of
Kansas adjusted gross income whether or not included in federal
adjusted gross income. Interest income on obligations of this state or a
political subdivision thereof issued after December 31, 1987, shall be
excluded from computation of Kansas adjusted gross income whether
or not included in federal adjusted gross income. House Substitute for SENATE BILL No. 37—page 13
(ii) Taxes on or measured by income or fees or payments in lieu of
income taxes imposed by this state or any other taxing jurisdiction to
the extent deductible in determining federal adjusted gross income and
not credited against federal income tax. This paragraph shall not apply
to taxes imposed under the provisions of K.S.A. 79-1107 or 79-1108,
and amendments thereto, for privilege tax year 1995, and all such years
thereafter.
(iii) The federal net operating loss deduction, except that the
federal net operating loss deduction shall not be added to an
individual's federal adjusted gross income for tax years beginning after
December 31, 2016.
(iv) Federal income tax refunds received by the taxpayer if the
deduction of the taxes being refunded resulted in a tax benefit for
Kansas income tax purposes during a prior taxable year. Such refunds
shall be included in income in the year actually received regardless of
the method of accounting used by the taxpayer. For purposes hereof, a
tax benefit shall be deemed to have resulted if the amount of the tax
had been deducted in determining income subject to a Kansas income
tax for a prior year regardless of the rate of taxation applied in such
prior year to the Kansas taxable income, but only that portion of the
refund shall be included as bears the same proportion to the total refund
received as the federal taxes deducted in the year to which such refund
is attributable bears to the total federal income taxes paid for such year.
For purposes of the foregoing sentence, federal taxes shall be
considered to have been deducted only to the extent such deduction
does not reduce Kansas taxable income below zero.
(v) The amount of any depreciation deduction or business expense
deduction claimed on the taxpayer's federal income tax return for any
capital expenditure in making any building or facility accessible to the
handicapped, for which expenditure the taxpayer claimed the credit
allowed by K.S.A. 79-32,177, and amendments thereto.
(vi) Any amount of designated employee contributions picked up
by an employer pursuant to K.S.A. 12-5005, 20-2603, 74-4919 and 74-
4965, and amendments thereto.
(vii) The amount of any charitable contribution made to the extent
the same is claimed as the basis for the credit allowed pursuant to
K.S.A. 79-32,196, and amendments thereto.
(viii) The amount of any costs incurred for improvements to a
swine facility, claimed for deduction in determining federal adjusted
gross income, to the extent the same is claimed as the basis for any
credit allowed pursuant to K.S.A. 79-32,204, and amendments thereto.
(ix) The amount of any ad valorem taxes and assessments paid and
the amount of any costs incurred for habitat management or
construction and maintenance of improvements on real property,
claimed for deduction in determining federal adjusted gross income, to
the extent the same is claimed as the basis for any credit allowed
pursuant to K.S.A. 79-32,203, and amendments thereto.
(x) Amounts received as nonqualified withdrawals, as defined by
K.S.A. 75-643, and amendments thereto, if, at the time of contribution
to a family postsecondary education savings account, such amounts
were subtracted from the federal adjusted gross income pursuant to
subsection (c)(xv) or if such amounts are not already included in the
federal adjusted gross income.
(xi) The amount of any contribution made to the same extent the
same is claimed as the basis for the credit allowed pursuant to K.S.A.
74-50,154, and amendments thereto.
(xii) For taxable years commencing after December 31, 2004,
amounts received as withdrawals not in accordance with the provisions
of K.S.A. 74-50,204, and amendments thereto, if, at the time of House Substitute for SENATE BILL No. 37—page 14
contribution to an individual development account, such amounts were
subtracted from the federal adjusted gross income pursuant to
subsection (c)(xiii), or if such amounts are not already included in the
federal adjusted gross income.
(xiii) The amount of any expenditures claimed for deduction in
determining federal adjusted gross income, to the extent the same is
claimed as the basis for any credit allowed pursuant to K.S.A. 79-
32,217 through 79-32,220 or 79-32,222, and amendments thereto.
(xiv) The amount of any amortization deduction claimed in
determining federal adjusted gross income to the extent the same is
claimed for deduction pursuant to K.S.A. 79-32,221, and amendments
thereto.
(xv) The amount of any expenditures claimed for deduction in
determining federal adjusted gross income, to the extent the same is
claimed as the basis for any credit allowed pursuant to K.S.A. 79-
32,223 through 79-32,226, 79-32,228 through 79-32,231, 79-32,233
through 79-32,236, 79-32,238 through 79-32,241, 79-32,245 through
79-32,248 or 79-32,251 through 79-32,254, and amendments thereto.
(xvi) The amount of any amortization deduction claimed in
determining federal adjusted gross income to the extent the same is
claimed for deduction pursuant to K.S.A. 79-32,227, 79-32,232, 79-
32,237, 79-32,249, 79-32,250 or 79-32,255, and amendments thereto.
(xvii) The amount of any amortization deduction claimed in
determining federal adjusted gross income to the extent the same is
claimed for deduction pursuant to K.S.A. 79-32,256, and amendments
thereto.
(xviii) For taxable years commencing after December 31, 2006,
the amount of any ad valorem or property taxes and assessments paid to
a state other than Kansas or local government located in a state other
than Kansas by a taxpayer who resides in a state other than Kansas,
when the law of such state does not allow a resident of Kansas who
earns income in such other state to claim a deduction for ad valorem or
property taxes or assessments paid to a political subdivision of the state
of Kansas in determining taxable income for income tax purposes in
such other state, to the extent that such taxes and assessments are
claimed as an itemized deduction for federal income tax purposes.
(xix) For taxable years beginning after December 31, 2012, and
ending before January 1, 2017, the amount of any: (1) Loss from
business as determined under the federal internal revenue code and
reported from schedule C and on line 12 of the taxpayer's form 1040
federal individual income tax return; (2) loss from rental real estate,
royalties, partnerships, S corporations, except those with wholly owned
subsidiaries subject to the Kansas privilege tax, estates, trusts, residual
interest in real estate mortgage investment conduits and net farm rental
as determined under the federal internal revenue code and reported
from schedule E and on line 17 of the taxpayer's form 1040 federal
individual income tax return; and (3) farm loss as determined under the
federal internal revenue code and reported from schedule F and on line
18 of the taxpayer's form 1040 federal income tax return; all to the
extent deducted or subtracted in determining the taxpayer's federal
adjusted gross income. For purposes of this subsection, references to
the federal form 1040 and federal schedule C, schedule E, and schedule
F, shall be to such form and schedules as they existed for tax year 2011,
and as revised thereafter by the internal revenue service.
(xx) For taxable years beginning after December 31, 2012, and
ending before January 1, 2017, the amount of any deduction for self-
employment taxes under section 164(f) of the federal internal revenue
code as in effect on January 1, 2012, and amendments thereto, in
determining the federal adjusted gross income of an individual House Substitute for SENATE BILL No. 37—page 15
taxpayer, to the extent the deduction is attributable to income reported
on schedule C, E or F and on line 12, 17 or 18 of the taxpayer's form
1040 federal income tax return.
(xxi) For taxable years beginning after December 31, 2012, and
ending before January 1, 2017, the amount of any deduction for
pension, profit sharing, and annuity plans of self-employed individuals
under section 62(a)(6) of the federal internal revenue code as in effect
on January 1, 2012, and amendments thereto, in determining the federal
adjusted gross income of an individual taxpayer.
(xxii) For taxable years beginning after December 31, 2012, and
ending before January 1, 2017, the amount of any deduction for health
insurance under section 162(l) of the federal internal revenue code as in
effect on January 1, 2012, and amendments thereto, in determining the
federal adjusted gross income of an individual taxpayer.
(xxiii) For taxable years beginning after December 31, 2012, and
ending before January 1, 2017, the amount of any deduction for
domestic production activities under section 199 of the federal internal
revenue code as in effect on January 1, 2012, and amendments thereto,
in determining the federal adjusted gross income of an individual
taxpayer.
(xxiv) For taxable years commencing after December 31, 2013,
that portion of the amount of any expenditure deduction claimed in
determining federal adjusted gross income for expenses paid for
medical care of the taxpayer or the taxpayer's spouse or dependents
when such expenses were paid or incurred for an abortion, or for a
health benefit plan, as defined in K.S.A. 65-6731, and amendments
thereto, for the purchase of an optional rider for coverage of abortion in
accordance with K.S.A. 40-2,190, and amendments thereto, to the
extent that such taxes and assessments are claimed as an itemized
deduction for federal income tax purposes.
(xxv) For taxable years commencing after December 31, 2013,
that portion of the amount of any expenditure deduction claimed in
determining federal adjusted gross income for expenses paid by a
taxpayer for health care when such expenses were paid or incurred for
abortion coverage, a health benefit plan, as defined in K.S.A. 65-6731,
and amendments thereto, when such expenses were paid or incurred for
abortion coverage or amounts contributed to health savings accounts
for such taxpayer's employees for the purchase of an optional rider for
coverage of abortion in accordance with K.S.A. 40-2,190, and
amendments thereto, to the extent that such taxes and assessments are
claimed as a deduction for federal income tax purposes.
(xxvi) For all taxable years beginning after December 31, 2016,
the amount of any charitable contribution made to the extent the same
is claimed as the basis for the credit allowed pursuant to K.S.A. 72-
4357, and amendments thereto, and is also claimed as an itemized
deduction for federal income tax purposes.
(xxvii) For all taxable years commencing after December 31,
2020, the amount deducted by reason of a carryforward of disallowed
business interest pursuant to section 163(j) of the federal internal
revenue code of 1986, as in effect on January 1, 2018.
(xxviii) For all taxable years beginning after December 31, 2021,
the amount of any contributions to, or earnings from, a first-time home
buyer savings account if distributions from the account were not used
to pay for expenses or transactions authorized pursuant to K.S.A. 2023
Supp. 58-4904, and amendments thereto, or were not held for the
minimum length of time required pursuant to K.S.A. 2023 Supp. 58-
4904, and amendments thereto. Contributions to, or earnings from,
such account shall also include any amount resulting from the account
holder not designating a surviving payable on death beneficiary House Substitute for SENATE BILL No. 37—page 16
pursuant to K.S.A. 2023 Supp. 58-4904(e), and amendments thereto.
(c) There shall be subtracted from federal adjusted gross income:
(i) Interest or dividend income on obligations or securities of any
authority, commission or instrumentality of the United States and its
possessions less any related expenses directly incurred in the purchase
of such obligations or securities, to the extent included in federal
adjusted gross income but exempt from state income taxes under the
laws of the United States.
(ii) Any amounts received which are included in federal adjusted
gross income but which are specifically exempt from Kansas income
taxation under the laws of the state of Kansas.
(iii) The portion of any gain or loss from the sale or other
disposition of property having a higher adjusted basis for Kansas
income tax purposes than for federal income tax purposes on the date
such property was sold or disposed of in a transaction in which gain or
loss was recognized for purposes of federal income tax that does not
exceed such difference in basis, but if a gain is considered a long-term
capital gain for federal income tax purposes, the modification shall be
limited to that portion of such gain which is included in federal
adjusted gross income.
(iv) The amount necessary to prevent the taxation under this act of
any annuity or other amount of income or gain which was properly
included in income or gain and was taxed under the laws of this state
for a taxable year prior to the effective date of this act, as amended, to
the taxpayer, or to a decedent by reason of whose death the taxpayer
acquired the right to receive the income or gain, or to a trust or estate
from which the taxpayer received the income or gain.
(v) The amount of any refund or credit for overpayment of taxes
on or measured by income or fees or payments in lieu of income taxes
imposed by this state, or any taxing jurisdiction, to the extent included
in gross income for federal income tax purposes.
(vi) Accumulation distributions received by a taxpayer as a
beneficiary of a trust to the extent that the same are included in federal
adjusted gross income.
(vii) Amounts received as annuities under the federal civil service
retirement system from the civil service retirement and disability fund
and other amounts received as retirement benefits in whatever form
which were earned for being employed by the federal government or
for service in the armed forces of the United States.
(viii) Amounts received by retired railroad employees as a
supplemental annuity under the provisions of 45 U.S.C. §§ 228b(a) and
228c(a)(1) et seq.
(ix) Amounts received by retired employees of a city and by
retired employees of any board of such city as retirement allowances
pursuant to K.S.A. 13-14,106, and amendments thereto, or pursuant to
any charter ordinance exempting a city from the provisions of K.S.A.
13-14,106, and amendments thereto.
(x) For taxable years beginning after December 31, 1976, the
amount of the federal tentative jobs tax credit disallowance under the
provisions of 26 U.S.C. § 280C. For taxable years ending after
December 31, 1978, the amount of the targeted jobs tax credit and work
incentive credit disallowances under 26 U.S.C. § 280C.
(xi) For taxable years beginning after December 31, 1986,
dividend income on stock issued by Kansas venture capital, inc.
(xii) For taxable years beginning after December 31, 1989,
amounts received by retired employees of a board of public utilities as
pension and retirement benefits pursuant to K.S.A. 13-1246, 13-1246a
and 13-1249, and amendments thereto.
(xiii) For taxable years beginning after December 31, 2004, House Substitute for SENATE BILL No. 37—page 17
amounts contributed to and the amount of income earned on
contributions deposited to an individual development account under
K.S.A. 74-50,201 et seq., and amendments thereto.
(xiv) For all taxable years commencing after December 31, 1996,
that portion of any income of a bank organized under the laws of this
state or any other state, a national banking association organized under
the laws of the United States, an association organized under the
savings and loan code of this state or any other state, or a federal
savings association organized under the laws of the United States, for
which an election as an S corporation under subchapter S of the federal
internal revenue code is in effect, which accrues to the taxpayer who is
a stockholder of such corporation and which is not distributed to the
stockholders as dividends of the corporation. For taxable years
beginning after December 31, 2012, and ending before January 1, 2017,
the amount of modification under this subsection shall exclude the
portion of income or loss reported on schedule E and included on line
17 of the taxpayer's form 1040 federal individual income tax return.
(xv) For all taxable years beginning after December 31, 2017, the
cumulative amounts not exceeding $3,000, or $6,000 for a married
couple filing a joint return, for each designated beneficiary that are
contributed to: (1) A family postsecondary education savings account
established under the Kansas postsecondary education savings program
or a qualified tuition program established and maintained by another
state or agency or instrumentality thereof pursuant to section 529 of the
internal revenue code of 1986, as amended, for the purpose of paying
the qualified higher education expenses of a designated beneficiary; or
(2) an achieving a better life experience (ABLE) account established
under the Kansas ABLE savings program or a qualified ABLE program
established and maintained by another state or agency or
instrumentality thereof pursuant to section 529A of the internal revenue
code of 1986, as amended, for the purpose of saving private funds to
support an individual with a disability. The terms and phrases used in
this paragraph shall have the meaning respectively ascribed thereto by
the provisions of K.S.A. 75-643 and 75-652, and amendments thereto,
and the provisions of such sections are hereby incorporated by
reference for all purposes thereof.
(xvi) For all taxable years beginning after December 31, 2004,
amounts received by taxpayers who are or were members of the armed
forces of the United States, including service in the Kansas army and
air national guard, as a recruitment, sign up or retention bonus received
by such taxpayer as an incentive to join, enlist or remain in the armed
services of the United States, including service in the Kansas army and
air national guard, and amounts received for repayment of educational
or student loans incurred by or obligated to such taxpayer and received
by such taxpayer as a result of such taxpayer's service in the armed
forces of the United States, including service in the Kansas army and
air national guard.
(xvii) For all taxable years beginning after December 31, 2004,
amounts received by taxpayers who are eligible members of the Kansas
army and air national guard as a reimbursement pursuant to K.S.A. 48-
281, and amendments thereto, and amounts received for death benefits
pursuant to K.S.A. 48-282, and amendments thereto, to the extent that
such death benefits are included in federal adjusted gross income of the
taxpayer.
(xviii) For the taxable year beginning after December 31, 2006,
amounts received as benefits under the federal social security act which
are included in federal adjusted gross income of a taxpayer with federal
adjusted gross income of $50,000 or less, whether such taxpayer's filing
status is single, head of household, married filing separate or married House Substitute for SENATE BILL No. 37—page 18
filing jointly; and (A) For all taxable years beginning after December
31, 2007, and ending before January 1, 2024, amounts received as
benefits under the federal social security act which are included in
federal adjusted gross income of a taxpayer with federal adjusted gross
income of $75,000 or less, whether such taxpayer's filing status is
single, head of household, married filing separate or married filing
jointly.
(B) For all taxable years beginning after December 31, 2023,
amounts received as benefits under the federal social security act that
are included in federal adjusted gross income of a taxpayer.
(xix) Amounts received by retired employees of Washburn
university as retirement and pension benefits under the university's
retirement plan.
(xx) For taxable years beginning after December 31, 2012, and
ending before January 1, 2017, the amount of any: (1) Net profit from
business as determined under the federal internal revenue code and
reported from schedule C and on line 12 of the taxpayer's form 1040
federal individual income tax return; (2) net income, not including
guaranteed payments as defined in section 707(c) of the federal internal
revenue code and as reported to the taxpayer from federal schedule K-
1, (form 1065-B), in box 9, code F or as reported to the taxpayer from
federal schedule K-1, (form 1065) in box 4, from rental real estate,
royalties, partnerships, S corporations, estates, trusts, residual interest
in real estate mortgage investment conduits and net farm rental as
determined under the federal internal revenue code and reported from
schedule E and on line 17 of the taxpayer's form 1040 federal
individual income tax return; and (3) net farm profit as determined
under the federal internal revenue code and reported from schedule F
and on line 18 of the taxpayer's form 1040 federal income tax return;
all to the extent included in the taxpayer's federal adjusted gross
income. For purposes of this subsection, references to the federal form
1040 and federal schedule C, schedule E, and schedule F, shall be to
such form and schedules as they existed for tax year 2011 and as
revised thereafter by the internal revenue service.
(xxi) For all taxable years beginning after December 31, 2013,
amounts equal to the unreimbursed travel, lodging and medical
expenditures directly incurred by a taxpayer while living, or a
dependent of the taxpayer while living, for the donation of one or more
human organs of the taxpayer, or a dependent of the taxpayer, to
another person for human organ transplantation. The expenses may be
claimed as a subtraction modification provided for in this section to the
extent the expenses are not already subtracted from the taxpayer's
federal adjusted gross income. In no circumstances shall the subtraction
modification provided for in this section for any individual, or a
dependent, exceed $5,000. As used in this section, "human organ"
means all or part of a liver, pancreas, kidney, intestine, lung or bone
marrow. The provisions of this paragraph shall take effect on the day
the secretary of revenue certifies to the director of the budget that the
cost for the department of revenue of modifications to the automated
tax system for the purpose of implementing this paragraph will not
exceed $20,000.
(xxii) For taxable years beginning after December 31, 2012, and
ending before January 1, 2017, the amount of net gain from the sale of:
(1) Cattle and horses, regardless of age, held by the taxpayer for draft,
breeding, dairy or sporting purposes, and held by such taxpayer for 24
months or more from the date of acquisition; and (2) other livestock,
regardless of age, held by the taxpayer for draft, breeding, dairy or
sporting purposes, and held by such taxpayer for 12 months or more
from the date of acquisition. The subtraction from federal adjusted House Substitute for SENATE BILL No. 37—page 19
gross income shall be limited to the amount of the additions recognized
under the provisions of subsection (b)(xix) attributable to the business
in which the livestock sold had been used. As used in this paragraph,
the term "livestock" shall not include poultry.
(xxiii) For all taxable years beginning after December 31, 2012,
amounts received under either the Overland Park, Kansas police
department retirement plan or the Overland Park, Kansas fire
department retirement plan, both as established by the city of Overland
Park, pursuant to the city's home rule authority.
(xxiv) For taxable years beginning after December 31, 2013, and
ending before January 1, 2017, the net gain from the sale from
Christmas trees grown in Kansas and held by the taxpayer for six years
or more.
(xxv) For all taxable years commencing after December 31, 2020,
100% of global intangible low-taxed income under section 951A of the
federal internal revenue code of 1986, before any deductions allowed
under section 250(a)(1)(B) of such code.
(xxvi) For all taxable years commencing after December 31, 2020,
the amount disallowed as a deduction pursuant to section 163(j) of the
federal internal revenue code of 1986, as in effect on January 1, 2018.
(xxvii) For taxable years commencing after December 31, 2020,
the amount disallowed as a deduction pursuant to section 274 of the
federal internal revenue code of 1986 for meal expenditures shall be
allowed to the extent such expense was deductible for determining
federal income tax and was allowed and in effect on December 31,
2017.
(xxviii) For all taxable years beginning after December 31, 2021:
(1) The amount contributed to a first-time home buyer savings account
pursuant to K.S.A. 2023 Supp. 58-4903, and amendments thereto, in an
amount not to exceed $3,000 for an individual or $6,000 for a married
couple filing a joint return; or (2) amounts received as income earned
from assets in a first-time home buyer savings account.
(d) There shall be added to or subtracted from federal adjusted
gross income the taxpayer's share, as beneficiary of an estate or trust, of
the Kansas fiduciary adjustment determined under K.S.A. 79-32,135,
and amendments thereto.
(e) The amount of modifications required to be made under this
section by a partner which relates to items of income, gain, loss,
deduction or credit of a partnership shall be determined under K.S.A.
79-32,131, and amendments thereto, to the extent that such items affect
federal adjusted gross income of the partner.
Sec. 17. On and after July 1, 2024, K.S.A. 2023 Supp. 79-32,119
is hereby amended to read as follows: 79-32,119. (a) The Kansas
standard deduction of an individual, including a husband and wife who
are either both residents or who file a joint return as if both were
residents, shall be equal to the sum of the standard deduction amount
allowed pursuant to this section, and the additional standard deduction
amount allowed pursuant to this section for each such deduction
allowable to such individual or to such husband and wife under the
federal internal revenue code.
(b) For tax year 1998, and all tax years thereafter, the additional
standard deduction amount shall be as follows: Single individual and
head of household filing status, $850; and married filing status, $700.
(c) (1) For tax year 2013 through tax year 2020, the standard
deduction amount of an individual, including husband and wife who
are either both residents or who file a joint return as if both were
residents, shall be as follows: Single individual filing status, $3,000;
married filing status, $7,500; and head of household filing status,
$5,500. House Substitute for SENATE BILL No. 37—page 20
(2) For tax year years 2021, and all tax years thereafter through
2023, the standard deduction amount of an individual, including
husband and wife who are either both residents or who file a joint
return as if both were residents, shall be as follows: Single individual
filing status, $3,500; married filing status, $8,000; and head of
household filing status, $6,000.
(2) For tax year 2024, and all tax years thereafter, the standard
deduction amount of an individual, including husband and wife who
are either both residents or who file a joint return as if both were
residents, shall be as follows: Single individual filing status, $3,605;
married filing status, $8,240; and head of household filing status,
$6,180.
(d) For purposes of this section, the federal standard deduction
allowable to a husband and wife filing separate Kansas income tax
returns shall be determined on the basis that separate federal returns
were filed, and the federal standard deduction of a husband and wife
filing a joint Kansas income tax return shall be determined on the basis
that a joint federal income tax return was filed.
Sec. 18. On and after July 1, 2024, K.S.A. 2023 Supp. 79-32,121
is hereby amended to read as follows: 79-32,121. (a) An individual For
tax year 2024, and all tax years thereafter, a taxpayer shall be allowed
a Kansas exemption of $2,250 for each exemption as follows:
(1) In the case of married individuals filing a joint return, a
personal exemption of $18,320;
(2) in the case of all other individuals with a filing status of single,
head of household or married filing separate, a personal exemption of
$9,160; and
(3) in addition to the amount allowed pursuant to paragraph (1)
or (2), a personal exemption of $2,320 for each dependent for which
such individual taxpayer is entitled to a deduction for the taxable year
for federal income tax purposes.
(b) In addition to the exemptions provided in subsection (a), any
individual who has been honorably discharged from active service in
any branch of the armed forces of the United States and who is certified
by the United States department of veterans affairs or its successor to
be in receipt of disability compensation at the 100% rate, if the
disability is permanent and was sustained through military action or
accident or resulted from disease contracted while in such active
service, such individual shall be allowed an additional Kansas
exemption of $2,250 for tax year 2023 and all tax years thereafter.
Sec. 19. K.S.A. 2023 Supp. 79-3603 is hereby amended to read as
follows: 79-3603. For the privilege of engaging in the business of
selling tangible personal property at retail in this state or rendering or
furnishing any of the services taxable under this act, there is hereby
levied and there shall be collected and paid a tax at the rate of 6.5%. On
and after January 1, 2023, 17% and on and after January 1, 2025 July
1, 2024, 18% of the tax rate imposed pursuant to this section and the
rate provided in K.S.A. 2023 Supp. 79-3603d, and amendments thereto,
shall be levied for the state highway fund, the state highway fund
purposes and those purposes specified in K.S.A. 68-416, and
amendments thereto, and all revenue collected and received from such
tax levy shall be deposited in the state highway fund.
Within a redevelopment district established pursuant to K.S.A. 74-
8921, and amendments thereto, there is hereby levied and there shall be
collected and paid an additional tax at the rate of 2% until the earlier of
the date the bonds issued to finance or refinance the redevelopment
project have been paid in full or the final scheduled maturity of the first
series of bonds issued to finance any part of the project.
Such tax shall be imposed upon: House Substitute for SENATE BILL No. 37—page 21
(a) The gross receipts received from the sale of tangible personal
property at retail within this state;
(b) the gross receipts from intrastate, interstate or international
telecommunications services and any ancillary services sourced to this
state in accordance with K.S.A. 79-3673, and amendments thereto,
except that telecommunications service does not include: (1) Any
interstate or international 800 or 900 service; (2) any interstate or
international private communications service as defined in K.S.A. 79-
3673, and amendments thereto; (3) any value-added nonvoice data
service; (4) any telecommunication service to a provider of
telecommunication services which will be used to render
telecommunications services, including carrier access services; or (5)
any service or transaction defined in this section among entities
classified as members of an affiliated group as provided by section
1504 of the federal internal revenue code of 1986, as in effect on
January 1, 2001;
(c) the gross receipts from the sale or furnishing of gas, water,
electricity and heat, which sale is not otherwise exempt from taxation
under the provisions of this act, and whether furnished by municipally
or privately owned utilities, except that, on and after January 1, 2006,
for sales of gas, electricity and heat delivered through mains, lines or
pipes to residential premises for noncommercial use by the occupant of
such premises, and for agricultural use and also, for such use, all sales
of propane gas, the state rate shall be 0%; and for all sales of propane
gas, LP gas, coal, wood and other fuel sources for the production of
heat or lighting for noncommercial use of an occupant of residential
premises, the state rate shall be 0%, but such tax shall not be levied and
collected upon the gross receipts from: (1) The sale of a rural water
district benefit unit; (2) a water system impact fee, system enhancement
fee or similar fee collected by a water supplier as a condition for
establishing service; or (3) connection or reconnection fees collected by
a water supplier;
(d) the gross receipts from the sale of meals or drinks furnished at
any private club, drinking establishment, catered event, restaurant,
eating house, dining car, hotel, drugstore or other place where meals or
drinks are regularly sold to the public;
(e) the gross receipts from the sale of admissions to any place
providing amusement, entertainment or recreation services including
admissions to state, county, district and local fairs, but such tax shall
not be levied and collected upon the gross receipts received from sales
of admissions to any cultural and historical event which occurs
triennially;
(f) the gross receipts from the operation of any coin-operated
device dispensing or providing tangible personal property, amusement
or other services except laundry services, whether automatic or
manually operated;
(g) the gross receipts from the service of renting of rooms by
hotels, as defined by K.S.A. 36-501, and amendments thereto, or by
accommodation brokers, as defined by K.S.A. 12-1692, and
amendments thereto, but such tax shall not be levied and collected upon
the gross receipts received from sales of such service to the federal
government and any agency, officer or employee thereof in association
with the performance of official government duties;
(h) the gross receipts from the service of renting or leasing of
tangible personal property except such tax shall not apply to the renting
or leasing of machinery, equipment or other personal property owned
by a city and purchased from the proceeds of industrial revenue bonds
issued prior to July 1, 1973, in accordance with the provisions of
K.S.A. 12-1740 through 12-1749, and amendments thereto, and any House Substitute for SENATE BILL No. 37—page 22
city or lessee renting or leasing such machinery, equipment or other
personal property purchased with the proceeds of such bonds who shall
have paid a tax under the provisions of this section upon sales made
prior to July 1, 1973, shall be entitled to a refund from the sales tax
refund fund of all taxes paid thereon;
(i) the gross receipts from the rendering of dry cleaning, pressing,
dyeing and laundry services except laundry services rendered through a
coin-operated device whether automatic or manually operated;
(j) the gross receipts from the rendering of the services of washing
and washing and waxing of vehicles;
(k) the gross receipts from cable, community antennae and other
subscriber radio and television services;
(l) (1) except as otherwise provided by paragraph (2), the gross
receipts received from the sales of tangible personal property to all
contractors, subcontractors or repairmen for use by them in erecting
structures, or building on, or otherwise improving, altering, or repairing
real or personal property.
(2) Any such contractor, subcontractor or repairman who
maintains an inventory of such property both for sale at retail and for
use by them for the purposes described by paragraph (1) shall be
deemed a retailer with respect to purchases for and sales from such
inventory, except that the gross receipts received from any such sale,
other than a sale at retail, shall be equal to the total purchase price paid
for such property and the tax imposed thereon shall be paid by the
deemed retailer;
(m) the gross receipts received from fees and charges by public
and private clubs, drinking establishments, organizations and
businesses for participation in sports, games and other recreational
activities, but such tax shall not be levied and collected upon the gross
receipts received from: (1) Fees and charges by any political
subdivision, by any organization exempt from property taxation
pursuant to K.S.A. 79-201 Ninth, and amendments thereto, or by any
youth recreation organization exclusively providing services to persons
18 years of age or younger which is exempt from federal income
taxation pursuant to section 501(c)(3) of the federal internal revenue
code of 1986, for participation in sports, games and other recreational
activities; and (2) entry fees and charges for participation in a special
event or tournament sanctioned by a national sporting association to
which spectators are charged an admission which is taxable pursuant to
subsection (e);
(n) the gross receipts received from dues charged by public and
private clubs, drinking establishments, organizations and businesses,
payment of which entitles a member to the use of facilities for
recreation or entertainment, but such tax shall not be levied and
collected upon the gross receipts received from: (1) Dues charged by
any organization exempt from property taxation pursuant to K.S.A. 79-
201 Eighth and Ninth, and amendments thereto; and (2) sales of
memberships in a nonprofit organization which is exempt from federal
income taxation pursuant to section 501(c)(3) of the federal internal
revenue code of 1986, and whose purpose is to support the operation of
a nonprofit zoo;
(o) the gross receipts received from the isolated or occasional sale
of motor vehicles or trailers but not including: (1) The transfer of motor
vehicles or trailers by a person to a corporation or limited liability
company solely in exchange for stock securities or membership interest
in such corporation or limited liability company; (2) the transfer of
motor vehicles or trailers by one corporation or limited liability
company to another when all of the assets of such corporation or
limited liability company are transferred to such other corporation or House Substitute for SENATE BILL No. 37—page 23
limited liability company; or (3) the sale of motor vehicles or trailers
which are subject to taxation pursuant to the provisions of K.S.A. 79-
5101 et seq., and amendments thereto, by an immediate family member
to another immediate family member. For the purposes of paragraph
(3), immediate family member means lineal ascendants or descendants,
and their spouses. Any amount of sales tax paid pursuant to the Kansas
retailers sales tax act on the isolated or occasional sale of motor
vehicles or trailers on and after July 1, 2004, which the base for
computing the tax was the value pursuant to K.S.A. 79-5105(a), (b)(1)
and (b)(2), and amendments thereto, when such amount was higher
than the amount of sales tax which would have been paid under the law
as it existed on June 30, 2004, shall be refunded to the taxpayer
pursuant to the procedure prescribed by this section. Such refund shall
be in an amount equal to the difference between the amount of sales tax
paid by the taxpayer and the amount of sales tax which would have
been paid by the taxpayer under the law as it existed on June 30, 2004.
Each claim for a sales tax refund shall be verified and submitted not
later than six months from the effective date of this act to the director
of taxation upon forms furnished by the director and shall be
accompanied by any additional documentation required by the director.
The director shall review each claim and shall refund that amount of
tax paid as provided by this act. All such refunds shall be paid from the
sales tax refund fund, upon warrants of the director of accounts and
reports pursuant to vouchers approved by the director of taxation or the
director's designee. No refund for an amount less than $10 shall be paid
pursuant to this act. In determining the base for computing the tax on
such isolated or occasional sale, the fair market value of any motor
vehicle or trailer traded in by the purchaser to the seller may be
deducted from the selling price;
(p) the gross receipts received for the service of installing or
applying tangible personal property which when installed or applied is
not being held for sale in the regular course of business, and whether or
not such tangible personal property when installed or applied remains
tangible personal property or becomes a part of real estate, except that
no tax shall be imposed upon the service of installing or applying
tangible personal property in connection with the original construction
of a building or facility, the original construction, reconstruction,
restoration, remodeling, renovation, repair or replacement of a
residence or the construction, reconstruction, restoration, replacement
or repair of a bridge or highway.
For the purposes of this subsection:
(1) "Original construction" means the first or initial construction
of a new building or facility. The term "original construction" shall
include the addition of an entire room or floor to any existing building
or facility, the completion of any unfinished portion of any existing
building or facility and the restoration, reconstruction or replacement of
a building, facility or utility structure damaged or destroyed by fire,
flood, tornado, lightning, explosion, windstorm, ice loading and
attendant winds, terrorism or earthquake, but such term, except with
regard to a residence, shall not include replacement, remodeling,
restoration, renovation or reconstruction under any other
circumstances;
(2) "building" means only those enclosures within which
individuals customarily are employed, or which are customarily used to
house machinery, equipment or other property, and including the land
improvements immediately surrounding such building;
(3) "facility" means a mill, plant, refinery, oil or gas well, water
well, feedlot or any conveyance, transmission or distribution line of any
cooperative, nonprofit, membership corporation organized under or House Substitute for SENATE BILL No. 37—page 24
subject to the provisions of K.S.A. 17-4601 et seq., and amendments
thereto, or municipal or quasi-municipal corporation, including the land
improvements immediately surrounding such facility;
(4) "residence" means only those enclosures within which
individuals customarily live;
(5) "utility structure" means transmission and distribution lines
owned by an independent transmission company or cooperative, the
Kansas electric transmission authority or natural gas or electric public
utility; and
(6) "windstorm" means straight line winds of at least 80 miles per
hour as determined by a recognized meteorological reporting agency or
organization;
(q) the gross receipts received for the service of repairing,
servicing, altering or maintaining tangible personal property which
when such services are rendered is not being held for sale in the regular
course of business, and whether or not any tangible personal property is
transferred in connection therewith. The tax imposed by this subsection
shall be applicable to the services of repairing, servicing, altering or
maintaining an item of tangible personal property which has been and
is fastened to, connected with or built into real property;
(r) the gross receipts from fees or charges made under service or
maintenance agreement contracts for services, charges for the providing
of which are taxable under the provisions of subsection (p) or (q);
(s) on and after January 1, 2005, the gross receipts received from
the sale of prewritten computer software and the sale of the services of
modifying, altering, updating or maintaining prewritten computer
software, whether the prewritten computer software is installed or
delivered electronically by tangible storage media physically
transferred to the purchaser or by load and leave;
(t) the gross receipts received for telephone answering services;
(u) the gross receipts received from the sale of prepaid calling
service and prepaid wireless calling service as defined in K.S.A. 79-
3673, and amendments thereto;
(v) all sales of bingo cards, bingo faces and instant bingo tickets
by licensees under K.S.A. 75-5171 et seq., and amendments thereto,
shall be exempt from taxes imposed pursuant to this section;
(w) all sales of charitable raffle tickets in accordance with K.S.A.
75-5171 et seq., and amendments thereto, shall be exempt from taxes
imposed pursuant to this section; and
(x) commencing on January 1, 2023, and thereafter, the state rate
on the gross receipts from the sale of food and food ingredients shall be
as set forth in K.S.A. 2023 Supp. 79-3603d, and amendments thereto.
Sec. 20. K.S.A. 2023 Supp. 79-3603d is hereby amended to read
as follows: 79-3603d. (a) There is hereby levied and there shall be
collected and paid a tax upon the gross receipts from the sale of food
and food ingredients. The rate of tax shall be as follows:
(1) Commencing on January 1, 2023, at the rate of 4%;
(2) commencing on January 1, 2024, at the rate of 2%; and
(3) commencing on January 1, 2025 July 1, 2024, and thereafter,
at the rate of 0%.
(b) The provisions of this section shall not apply to prepared food
unless sold without eating utensils provided by the seller and described
below:
(1) Food sold by a seller whose proper primary NAICS
classification is manufacturing in sector 311, except subsector 3118
(bakeries);
(2) (A) food sold in an unheated state by weight or volume as a
single item; or
(B) only meat or seafood sold in an unheated state by weight or House Substitute for SENATE BILL No. 37—page 25
volume as a single item;
(3) bakery items, including bread, rolls, buns, biscuits, bagels,
croissants, pastries, donuts, danish, cakes, tortes, pies, tarts, muffins,
bars, cookies and tortillas; or
(4) food sold that ordinarily requires additional cooking, as
opposed to just reheating, by the consumer prior to consumption.
(c) The provisions of this section shall be a part of and
supplemental to the Kansas retailers' sales tax act.
Sec. 21. K.S.A. 2023 Supp. 79-3620 is hereby amended to read as
follows: 79-3620. (a) All revenue collected or received by the director
of taxation from the taxes imposed by this act shall be remitted to the
state treasurer in accordance with the provisions of K.S.A. 75-4215,
and amendments thereto. Upon receipt of each such remittance, the
state treasurer shall deposit the entire amount in the state treasury, less
amounts withheld as provided in subsection (b) and amounts credited
as provided in subsections (c), (d) and (e), to the credit of the state
general fund.
(b) A refund fund, designated as "sales tax refund fund" not to
exceed $100,000 shall be set apart and maintained by the director from
sales tax collections and estimated tax collections and held by the state
treasurer for prompt payment of all sales tax refunds. Such fund shall
be in such amount, within the limit set by this section, as the director
shall determine is necessary to meet current refunding requirements
under this act. In the event such fund as established by this section is, at
any time, insufficient to provide for the payment of refunds due
claimants thereof, the director shall certify the amount of additional
funds required to the director of accounts and reports who shall
promptly transfer the required amount from the state general fund to the
sales tax refund fund, and notify the state treasurer, who shall make
proper entry in the records.
(c) (1) On January 1, 2023, the state treasurer shall credit 17% of
the revenue collected and received from the tax imposed by K.S.A. 79-
3603, and amendments thereto, at the rates provided in K.S.A. 79-3603,
and amendments thereto, and K.S.A. 2023 Supp. 79-3603d, and
amendments thereto, and deposited as provided by subsection (a),
exclusive of amounts credited pursuant to subsection (d), in the state
highway fund.
(2) On January 1, 2025 July 1, 2024, and thereafter, the state
treasurer shall credit 18% of the revenue collected and received from
the tax imposed by K.S.A. 79-3603, and amendments thereto, at the
rates provided in K.S.A. 79-3603, and amendments thereto, and K.S.A.
2023 Supp. 79-3603d, and amendments thereto, and deposited as
provided by subsection (a), exclusive of amounts credited pursuant to
subsection (d), in the state highway fund.
(d) The state treasurer shall credit all revenue collected or received
from the tax imposed by K.S.A. 79-3603, and amendments thereto, as
certified by the director, from taxpayers doing business within that
portion of a STAR bond project district occupied by a STAR bond
project or taxpayers doing business with such entity financed by a
STAR bond project as defined in K.S.A. 12-17,162, and amendments
thereto, that was determined by the secretary of commerce to be of
statewide as well as local importance or will create a major tourism
area for the state or the project was designated as a STAR bond project
as defined in K.S.A. 12-17,162, and amendments thereto, to the city
bond finance fund, which fund is hereby created. The provisions of this
subsection shall expire when the total of all amounts credited hereunder
and under K.S.A. 79-3710(d), and amendments thereto, is sufficient to
retire the special obligation bonds issued for the purpose of financing
all or a portion of the costs of such STAR bond project. House Substitute for SENATE BILL No. 37—page 26
(e) All revenue certified by the director of taxation as having been
collected or received from the tax imposed by K.S.A. 79-3603(c), and
amendments thereto, on the sale or furnishing of gas, water, electricity
and heat for use or consumption within the intermodal facility district
described in this subsection, shall be credited by the state treasurer to
the state highway fund. Such revenue may be transferred by the
secretary of transportation to the rail service improvement fund
pursuant to law. The provisions of this subsection shall take effect upon
certification by the secretary of transportation that a notice to proceed
has been received for the construction of the improvements within the
intermodal facility district, but not later than December 31, 2010, and
shall expire when the secretary of revenue determines that the total of
all amounts credited hereunder and pursuant to K.S.A. 79-3710(e), and
amendments thereto, is equal to $53,300,000, but not later than
December 31, 2045. Thereafter, all revenues shall be collected and
distributed in accordance with applicable law. For all tax reporting
periods during which the provisions of this subsection are in effect,
none of the exemptions contained in K.S.A. 79-3601 et seq., and
amendments thereto, shall apply to the sale or furnishing of any gas,
water, electricity and heat for use or consumption within the intermodal
facility district. As used in this subsection, "intermodal facility district"
shall consist of an intermodal transportation area as defined by K.S.A.
12-1770a(oo), and amendments thereto, located in Johnson county
within the polygonal-shaped area having Waverly Road as the eastern
boundary, 191
st
Street as the southern boundary, Four Corners Road as
the western boundary, and Highway 56 as the northern boundary, and
the polygonal-shaped area having Poplar Road as the eastern boundary,
183
rd
Street as the southern boundary, Waverly Road as the western
boundary, and the BNSF mainline track as the northern boundary, that
includes capital investment in an amount exceeding $150 million for
the construction of an intermodal facility to handle the transfer, storage
and distribution of freight through railway and trucking operations.
Sec. 22. K.S.A. 2023 Supp. 79-3703 is hereby amended to read as
follows: 79-3703. (a) There is hereby levied and there shall be collected
from every person in this state a tax or excise for the privilege of using,
storing, or consuming within this state any article of tangible personal
property. Such tax shall be levied and collected in an amount equal to
the consideration paid by the taxpayer multiplied by the rate of 6.5%.
(b) Commencing on January 1, 2023, and thereafter, the state rate
on the amount equal to the consideration paid by the taxpayer from the
sale of food and food ingredients as provided in K.S.A. 79-3603, and
amendments thereto, shall be as set forth in K.S.A. 2023 Supp. 79-
3603d, and amendments thereto.
(c) On and after January 1, 2023, 17% and on and after January 1,
2025 July 1, 2024, 18% of the tax rate imposed pursuant to this section
and the rate provided in K.S.A. 2023 Supp. 79-3603d, and amendments
thereto, shall be levied for the state highway fund, the state highway
fund purposes and those purposes specified in K.S.A. 68-416, and
amendments thereto, and all revenue collected and received from such
tax levy shall be deposited in the state highway fund.
(d) Within a redevelopment district established pursuant to K.S.A.
74-8921, and amendments thereto, there is hereby levied and there shall
be collected and paid an additional tax of 2% until the earlier of: (1)
The date the bonds issued to finance or refinance the redevelopment
project undertaken in the district have been paid in full; or (2) the final
scheduled maturity of the first series of bonds issued to finance the
redevelopment project.
(e) All property purchased or leased within or without this state
and subsequently used, stored or consumed in this state shall be subject House Substitute for SENATE BILL No. 37—page 27
to the compensating tax if the same property or transaction would have
been subject to the Kansas retailers' sales tax had the transaction been
wholly within this state.
Sec. 23. K.S.A. 2023 Supp. 79-3710 is hereby amended to read as
follows: 79-3710. (a) All revenue collected or received by the director
under the provisions of this act shall be remitted to the state treasurer in
accordance with the provisions of K.S.A. 75-4215, and amendments
thereto. Upon receipt of each such remittance, the state treasurer shall
deposit the entire amount in the state treasury, less amounts set apart as
provided in subsection (b) and amounts credited as provided in
subsection (c), (d) and (e), to the credit of the state general fund.
(b) A revolving fund, designated as "compensating tax refund
fund" not to exceed $10,000 shall be set apart and maintained by the
director from compensating tax collections and estimated tax
collections and held by the state treasurer for prompt payment of all
compensating tax refunds. Such fund shall be in such amount, within
the limit set by this section, as the director shall determine is necessary
to meet current refunding requirements under this act.
(c) (1) On January 1, 2023, the state treasurer shall credit 17% of
the revenue collected and received from the tax imposed by K.S.A. 79-
3703, and amendments thereto, at the rates provided in K.S.A. 79-3703,
and amendments thereto, and K.S.A. 2023 Supp. 79-3603d, and
amendments thereto, and deposited as provided by subsection (a),
exclusive of amounts credited pursuant to subsection (d), in the state
highway fund.
(2) On January 1, 2025 July 1, 2024, and thereafter, the state
treasurer shall credit 18% of the revenue collected and received from
the tax imposed by K.S.A. 79-3703, and amendments thereto, at the
rates provided in K.S.A. 79-3703, and amendments thereto, and K.S.A.
2023 Supp. 79-3603d, and amendments thereto, and deposited as
provided by subsection (a), exclusive of amounts credited pursuant to
subsection (d), in the state highway fund.
(d) The state treasurer shall credit all revenue collected or received
from the tax imposed by K.S.A. 79-3703, and amendments thereto, as
certified by the director, from taxpayers doing business within that
portion of a redevelopment district occupied by a redevelopment
project that was determined by the secretary of commerce to be of
statewide as well as local importance or will create a major tourism
area for the state as defined in K.S.A. 12-1770a, and amendments
thereto, to the city bond finance fund created by K.S.A. 79-3620(d),
and amendments thereto. The provisions of this subsection shall expire
when the total of all amounts credited hereunder and under K.S.A. 79-
3620(d), and amendments thereto, is sufficient to retire the special
obligation bonds issued for the purpose of financing all or a portion of
the costs of such redevelopment project.
This subsection shall not apply to a project designated as a special
bond project as defined in K.S.A. 12-1770a(z), and amendments
thereto.
(e) All revenue certified by the director of taxation as having been
collected or received from the tax imposed by K.S.A. 79-3603(c), and
amendments thereto, on the sale or furnishing of gas, water, electricity
and heat for use or consumption within the intermodal facility district
described in this subsection, shall be credited by the state treasurer to
the state highway fund. Such revenue may be transferred by the
secretary of transportation to the rail service improvement fund
pursuant to law. The provisions of this subsection shall take effect upon
certification by the secretary of transportation that a notice to proceed
has been received for the construction of the improvements within the
intermodal facility district, but not later than December 31, 2010, and House Substitute for SENATE BILL No. 37—page 28
shall expire when the secretary of revenue determines that the total of
all amounts credited hereunder and pursuant to K.S.A. 79-3620(e), and
amendments thereto, is equal to $53,300,000, but not later than
December 31, 2045. Thereafter, all revenues shall be collected and
distributed in accordance with applicable law. For all tax reporting
periods during which the provisions of this subsection are in effect,
none of the exemptions contained in K.S.A. 79-3601 et seq., and
amendments thereto, shall apply to the sale or furnishing of any gas,
water, electricity and heat for use or consumption within the intermodal
facility district. As used in this subsection, "intermodal facility district"
shall consist of an intermodal transportation area as defined by K.S.A.
12-1770a(oo), and amendments thereto, located in Johnson county
within the polygonal-shaped area having Waverly Road as the eastern
boundary, 191
st
Street as the southern boundary, Four Corners Road as
the western boundary, and Highway 56 as the northern boundary, and
the polygonal-shaped area having Poplar Road as the eastern boundary,
183
rd
Street as the southern boundary, Waverly Road as the western
boundary, and the BNSF mainline track as the northern boundary, that
includes capital investment in an amount exceeding $150 million for
the construction of an intermodal facility to handle the transfer, storage
and distribution of freight through railway and trucking operations.
Sec. 24. K.S.A. 2023 Supp. 79-3603, 79-3603d, 79-3620, 79-3703
and 79-3710 are hereby repealed.
Sec. 25. On and after July 1, 2024, K.S.A. 19-2694, 65-163j, 65-
3306, 65-3327, 75-2556, 79-1107, 79-1108, 79-1479, 79-2960, 79-
2961, 79-2962, 79-2965, 79-2966 and 79-2967 and K.S.A. 2023 Supp.
72-5142, 74-8768, 79-201x, 79-2959, 79-2964, 79-2988, 79-32,110,
79-32,117, 79-32,119 and 79-32,121 are hereby repealed. House Substitute for SENATE BILL No. 37—page 29
Sec. 26. This act shall take effect and be in force from and after its
publication in the Kansas register.
I hereby certify that the above BILL originated in the
SENATE, and passed that body
__________________________
SENATE adopted
Conference Committee Report ________________
_________________________
President of the Senate.
_________________________
Secretary of the Senate.
Passed the HOUSE
as amended _________________________
HOUSE adopted
Conference Committee Report ________________
_________________________
Speaker of the House.
_________________________
Chief Clerk of the House.
APPROVED _____________________________
_________________________
Governor.