REVISED
SESSION OF 2024
SECOND CONFERENCE COMMITTEE REPORT BRIEF
HOUSE SUBSTITUTE FOR SENATE BILL NO. 3 7
As Agreed to April 30, 2024
Brief*
House Sub. for SB 37 would make various changes to income, sales, and property tax law.
Specifically, the bill would:
●Restructure individual income tax brackets and rates to provide for a two-bracket
system;
●Exempt Social Security income from the individual income tax;
●Increase the standard deduction and personal exemption amounts;
●Reduce privilege tax rates;
●Abolish the Local Ad Valorem Tax Reduction Fund and County and City Revenue
Sharing Fund;
●Increase the amount of the appraised value of residential property exempt from the
statewide uniform school finance levy and reduce the mill levy; and
●Accelerate the elimination of the state sales and compensating use tax rate on food
and food ingredients and the associated disposition of revenue changes.
The bill would take effect upon publication in the Kansas Register.
Individual Income Tax Brackets and Rates
The bill would restructure the Kansas individual income tax brackets to a two-bracket
system, beginning in tax year 2024. For married individuals filing jointly, taxable income of $0 to
$46,000 would be taxed at 5.2 percent, and taxable income of $46,001 and above would be
taxed at 5.57 percent.
For all other filers, taxable income of $0 to $23,000 would be taxed at 5.2 percent, and
taxable income of $23,001 and above would be taxed at 5.57 percent.
____________________
*Conference committee report briefs are prepared by the Legislative Research Department and do not express
legislative intent. No summary is prepared when the report is an agreement to disagree. Conference committee
report briefs may be accessed on the Internet at http://www.kslegislature.org/klrd
1 - 37 Social Security Benefit Exemption
Beginning in tax year 2024, all Social Security benefits would be exempt from Kansas
income tax.
Standard Deduction and Personal Exemption Increases
The bill would increase the standard deduction amounts from $3,500 to $3,605 for single
filing status, $8,000 to $8,240 for married filing status, and $6,000 to $6,180 for head of
household filing status beginning in tax year 2024.
The bill would also increase the personal exemption allowance amount, currently set at
$2,250 for all persons on the return, to $18,320 for married couples filing joint returns, $9,160
for all other filers, and an additional $2,320 for each dependent listed on the return.
Financial Institutions Privilege Tax Rate Changes
The bill would reduce the privilege tax rates applied to financial institutions:
●For banks, the normal tax rate would be reduced from 2.25 percent to 1.94 percent
for tax year 2024 and all years thereafter; and
●For trust companies and savings and loan associations, the normal tax rate would be
reduced from 2.25 percent to 1.93 percent for tax year 2024 and all years thereafter.
[Note: The surtaxes on financial institutions would not be affected by the bill.]
Local Government Transfers
The bill would abolish the Local Ad Valorem Tax Reduction Fund and County and City
Revenue Sharing Fund and eliminate statutory transfers from the State General Fund (SGF) to
these funds.
School Finance Levy Residential Exemption
The bill would increase, beginning in tax year 2024, the amount of residential property
exempt from the statewide uniform school finance levy to $100,000 of appraised value.
The bill would discontinue the formula to increase the amount of the exemption based
upon the statewide average increase in residential valuation over the preceding ten years.
The bill would reduce the uniform school finance levy from 20 mills to 19.5 mills beginning
in tax year 2024.
The bill would require a demand transfer to be made from the SGF to the School Finance
Fund in the amount of any reduction to the State School District Finance Fund attributable to the
residential exemption in excess of $42,049 and the mill levy below 20 mills, as certified by the
Director of the Budget.
2 - 37 Food Sales Tax Changes
The bill would accelerate the elimination of the state sales and compensating use tax rate
on food and food ingredients from January 1, 2025, to July 1, 2024.
The bill would accelerate the raise in the percentage of sales tax revenue distributed to the
State Highway Fund to 18.0 percent of sales and use tax receipts beginning July 1, 2024, rather
than beginning on January 1, 2025.
Conference Committee Action
The second Conference Committee agreed to remove the contents of House Sub. for SB
37 and insert the provisions described above.
Background
The second Conference Committee removed the contents of House Sub. for SB 37 and
inserted a comprehensive tax plan. The original contents of SB 37, as it passed the Senate in
2023, pertained to amendments to the Kansas Housing Investor Tax Credit Act. Those
provisions were inserted into SB 34 and that bill was included in the Conference Committee
Report for SB 17 (2023 law). In 2024, the House Committee on Financial Institutions and
Pensions recommended a substitute bill incorporating provisions that would create the
Countries of Concern Divestment and Procurement Protection Act. Provisions pertaining to
divestment were included in the Conference Committee Report for HB 2711 (2024 law).
Provisions pertaining to procurement were included in the second Conference Committee
Report for House Sub. for SB 271, which was vetoed by the Governor and the veto was not
overridden.
Comprehensive tax plans considering similar provisions had previously been adopted by
the House in House Sub. for SB 300 and by the Senate in SB 539. Background information for
those bills is provided below.
House Sub. for SB 300 (House Tax Plan)
The bill was introduced by the Senate Committee on Taxation at the request of Senator
Blasi and, as introduced, concerned privilege tax rates. The House Committee on Taxation
removed the contents of the bill and inserted the amended contents of HB 2844, the
background of which follows below.
HB 2844
HB 2844 was introduced by the House Committee on Taxation at the request of
Representative A. Smith.
3 - 37 House Committee on Taxation
In the House Committee hearing, proponent testimony was provided by representatives of
the Kansas Chamber, Kansas Farm Bureau, Kansas Livestock Association, and Kansas Policy
Institute. The proponents generally stated the bill would provided broad-based tax relief and
represented a compromise of various other tax plans.
Written-only proponent testimony was provided by representatives of Kansas Association
of Realtors, Kansas Bankers Association, and National Federation of Independent Business–
Kansas.
Neutral testimony was provided by representatives of the Institute for Policy and Social
Research at the University of Kansas and the Kansas National Education Association.
Written-only neutral testimony was provided by representatives of the Kansas Association
of Counties and Kansas Association of School Boards.
No other testimony was provided.
The House Committee amended the bill to insert the provision reinstating the transfer to
the Special City and County Highway Fund.
House Committee of the Whole
The House Committee of the Whole amended the bill to:
●Exempt all Social Security benefits from the individual income tax;
●Increase the amount of the appraised value of residential property exempt from the
statewide uniform 20-mill school finance levy to $100,000 and eliminate the provision
providing for future increases to the exempt amount;
●Require a demand transfer to the School Finance Fund; and
●Accelerate the elimination of state sales and compensating use tax on food and food
ingredients and the associated disposition of revenue changes.
SB 539 (Senate Tax Plan)
The bill was introduced by the Senate Committee on Assessment and Taxation at the
request of Senator Tyson.
4 - 37 Senate Committee on Assessment and Taxation
In the Senate Committee hearing, proponent testimony was provided by Representative
Awerkamp, a representative of Americans for Tax Reform, and two private citizens. The
proponents generally stated the bill would provide broad tax relief to Kansans, single-rate tax
systems are easier for taxpayers to understand, and the bill is responsive to criticisms of
previous tax plans.
Written-only proponent testimony was provided by representatives of Kansas Association
of Realtors, Kansas Bankers Association, Kansas Chamber, Kansas Policy Institute, and
National Federation of Independent Business–Kansas.
Written-only opponent testimony was provided by representatives of Kansas Action for
Children, Kansas National Education Association, Tax Simple Center, and Voter Rights Network
of Wyandotte County, and a private citizen.
No other testimony was provided.
The Senate Committee amended the bill to provide for the full exemption of Social Security
benefits and to remove a provision that would accelerate the final reduction of the state sales
tax rate on food and food ingredients.
Senate Committee of the Whole
On March 14, 2024, the Senate Committee of the Whole amended the bill to:
●Add a child tax credit;
●Accelerate the elimination of state sales and compensating use tax on food and food
ingredients and the associated disposition of revenue changes; and
●Increase the amount of the appraised value of residential property exempt from the
statewide uniform 20-mill school finance levy to $100,000.
Fiscal Information
According to the Department of Revenue, the tax provisions of the Conference Committee
Report are estimated to have the following fiscal effects:
5 - 37 (Dollars in Millions)
FY
2025
FY
2026
FY
2027
FY
2028
FY
2029
Income Tax Brackets, Std Ded, Pers Ex$ (261.1)$(203.0)$ (205.0)$ (207.1)$(209.1)
Social Security Exemption (152.1) (120.7) (124.4) (128.1) (131.9)
Privilege Tax Reductions (4.8) (3.7) (3.7) (3.7) (3.7)
Food Sales Tax to 0.0% Acceleration (79.7) - - - -
School Dist. Fin. Fund Transfer (110.7) (112.5) (114.4) (116.3) (118.3)
Subtotal State General Fund $ (608.4)$(439.9)$ (447.5)$ (455.2)$(463.0)
Food Sales Tax to 0.0% Acceleration 3.1 - - - -
Subtotal State Highway Fund $ 3.1 $ - $ - $ - $ -
Res. Property Tax Exempt. and Mill
Levy
(105.5) (103.0) (100.3) (97.5) (94.4)
State General Fund Transfer 110.7 112.5 114.4 116.3 118.3
Subtotal State School Dist. Fin. Fund$ 5.2 $ 9.5 $ 14.1$ 18.8$ 23.9
Total All Funds $ (600.1)$(430.4)$ (433.4)$ (436.4)$(439.1)
Additionally, the Division of the Budget indicates the elimination of transfers to the Local Ad
Valorem Tax Reduction Fund and the County and City Revenue Sharing Fund would increase
SGF revenues by approximately $156.0 million in FY 2026 and $158.0 million in FY 2027, as
these transfers are currently scheduled to resume beginning in FY 2026.
The fiscal effects associated with the Social Security income taxation exemption, standard
deduction increases, privilege tax rate changes, and school finance levy residential exemption
increases are partially reflected in The FY 2025 Governor’s Budget Report.
Taxation; income tax; property tax; rates; credits; social security benefits; standard deduction; privilege tax; residential exemption;
mill levy; local ad valorem tax reduction fund; food sales tax
ccrb_sb37_02_43024.odt
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