SESSION OF 2023
SUPPLEMENTAL NOTE ON SENATE BILL NO. 40
As Amended by Senate Committee of the Whole
Brief*
SB 40, as amended, would allow taxpayers to subtract
certain net operating losses in determining their Kansas
adjusted gross income and would make changes to the
Homestead Property Tax Refund Act.
Net Operating Losses
The bill would create a subtraction modification allowing
taxpayers who carried back federal net operating losses in
tax year 2018 through 2020 pursuant to the federal CARES
Act to subtract such amounts from their income for purposes
of determining Kansas adjusted gross income. Taxpayers
would be permitted to carry forward such net operating loss
for up to 20 years if the amount exceeds the Kansas adjusted
gross income of the taxpayer.
The bill would extend the deadline for eligible taxpayers
to file amended returns for tax years 2018 through 2020 until
April 15, 2025.
Homestead Property Tax Refund Act Changes
The bill would make changes to the refund option
providing for a refund of the amount of tax in excess of the
base year amount under the Homestead Property Tax Refund
Act.
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*Supplemental notes are prepared by the Legislative Research
Department and do not express legislative intent. The supplemental
note and fiscal note for this bill may be accessed on the Internet at
http://www.kslegislature.org [Note: The Homestead Property Tax Refund Act includes
three different refund options. The other two refund options
would not be impacted by the bill.]
The bill would, for purposes of only this refund option,
exclude from the definition of “household income” all Social
Security benefits, of which one-half are currently included in
the definition.
The bill would increase the maximum amount of income
for which taxpayers would be eligible for this refund option
from $50,000 to $75,000.
The bill would increase the maximum appraised value of
an eligible claimant’s home in the base year from $350,000 to
$595,000 and provide for future increases to this amount
based upon the average percentage change in statewide
residential valuation of existing residential real estate for the
preceding 10 years.
The changes to the refund option would be retroactive to
tax year 2022, and the deadline to file claims for tax year
2022 would be extended from April 15, 2023, to April 15,
2024.
Background
The bill was introduced by the Senate Committee on
Assessment and Taxation at the request of Senator Tyson.
Senate Committee on Assessment and Taxation
In the Senate Committee hearing, proponent testimony
was provided by representatives of BridgeBuilder Tax and
Legal Services and the National Federation of Independent
Businesses. Proponents stated the bill would allow Kansas
taxpayers to benefit from 2020 changes to the federal tax
code.
2- 40 No other testimony was provided.
Senate Committee of the Whole
The Senate Committee of the Whole amended the bill to
insert the contents of SB 80, as amended by the Senate
Committee on Assessment and Taxation and to further
amend those contents to increase the income threshold to
$75,000.
SB 80 (Homestead Property Tax Refund Act Changes)
The bill was introduced by the Senate Committee on
Assessment and Taxation at the request of Senator Tyson.
Senate Committee on Assessment and Taxation
In the Senate Committee hearing, written-only
proponent testimony was provided by a representative of the
Kansas Policy Institute.
Neutral testimony was provided by a representative of
the Military Officers Association of America-Kansas.
No other testimony was provided.
The Senate Committee amended the bill to increase the
maximum appraised value of a claimant’s home and provide
for retroactivity of the provisions of the bill.
Fiscal Information
Net Operating Losses
According to the fiscal note prepared by the Division of
the Budget on SB 40, as introduced, the Department of
3- 40 Revenue estimates enactment of the bill would reduce State
General Fund receipts by $8.4 million in FY 2024 and $8.4
million in FY 2025. The bill would have no fiscal effect after
those years. Any fiscal effect associated with the bill is not
reflected in The FY 2024 Governor’s Budget Report.
Homestead Property Tax Refund Act Changes
A fiscal note regarding the Homestead Property Tax
Refund Program provisions was not immediately available.
Taxation; income tax; net operating losses; carry back; carry forward; property tax;
refunds; income; valuation; Homestead program; Social Security; Homestead
Property Tax Refund Act
4- 40