Kansas 2023-2024 Regular Session

Kansas Senate Bill SB507

Introduced

2/13/24

Refer

2/14/24

Failed

4/30/24

Caption

Providing for the apportionment of business income by the single sales factor and requiring the use of single sales factor pursuant to the multistate tax compact.

Impact

The passage of SB507 is expected to have significant implications for businesses operating in Kansas, particularly those involved in interstate commerce. Supporters of the bill argue that adopting a single sales factor for apportionment will enhance competitiveness for Kansas businesses, making them more attractive for investments. This change aims to encourage business growth and job creation within the state by reducing the complexity associated with current multistate tax calculations. The bill also emphasizes revenue stability for the state by ensuring a more predictable tax base derived from sales activities.

Summary

Senate Bill 507 seeks to modify the apportionment of business income for income tax purposes in the state of Kansas by implementing a single sales factor approach. The bill amends several provisions of the Kansas Income Tax Act and recognizes the multistate tax compact, thereby aligning Kansas tax law with a broader national framework regarding the taxation of income earned by businesses that operate in multiple states. By shifting to a single sales factor method, the bill simplifies the calculation of business taxes based primarily on sales made in Kansas, rather than also considering property and payroll factors.

Contention

However, there are some notable concerns and points of contention regarding SB507. Opponents argue that the single sales factor method may disproportionately benefit certain industries over others, particularly those with high sales volumes but lower payrolls and property investments. Critics caution that while the bill may simplify taxation for some businesses, it could also lead to increased tax burdens on others, in turn affecting local governments that rely on property and payroll taxes for their revenues. The debate centers around striking a balance between encouraging business investment and maintaining fairness in tax obligations for all Kansas-based entities.

Latest SB507 Activity

Companion Bills

No companion bills found.

Similar Bills

KS HB2796

Providing for the apportionment of business income by the single sales factor and requiring the use of single sales factor pursuant to the multistate tax compact.

KS HB2336

Providing for the apportionment of business income by the single sales factor and the apportionment of financial institution income by the receipts factor, deductions from income when using the single sales factor and receipts factor, the decrease in corporate income tax rates determining when sales other than tangible personal property are made in the state and excluding sales of a unitary business group of electric and natural gas public utilities.

KS HB2231

Providing an additional personal exemption for head of household tax filers and increasing the personal exemption for certain disabled veterans for purposes of income tax, modifying the definition of household income related to increased property tax homestead refund claims, providing for the apportionment of business income by the single sales factor and the apportionment of financial institution income by the receipts factor, providing for the apportionment pursuant to the three-factor test of a manufacturer who sells alcoholic liquor, requiring the use of single sales factor pursuant to the multistate tax compact, establishing deductions from income when using the single sales factor and receipts factor, providing for the decrease in corporate income tax rates, determining when sales other than tangible personal property are made in the state, excluding sales of a unitary business group of electric and natural gas public utilities, providing property tax exemptions for certain personal property including watercraft, marine equipment, off-road vehicles, motorized bicycles and certain trailers.