Kansas 2025-2026 Regular Session

Kansas House Bill HB2119 Compare Versions

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1	1	Session of 2025
2	2	HOUSE BILL No. 2119
3	3	By Committee on Commerce, Labor and Economic Development
4	4	Requested by Representative Tarwater
5	5	1-28
6	6	AN ACT concerning taxation; relating to the Kansas affordable housing
7	7	tax credit act; discontinuing such credit effective July 1, 2025;
8	8	amending K.S.A. 2024 Supp. 79-32,306 and repealing the existing
9	9	section.
10	10	Be it enacted by the Legislature of the State of Kansas:
11	11	Section 1. K.S.A. 2024 Supp. 79-32,306 is hereby amended to read as
12	12	follows: 79-32,306. (a) For all taxable years commencing after December
13	13	31, 2022, and ending on December 31, 2025, except as provided in
14	14	subsection (i), there shall be allowed a credit against the income tax
15	15	liability imposed pursuant to the Kansas income tax act, the privilege tax
16	16	liability imposed upon any national banking association, state bank, trust
17	17	company or savings and loan association pursuant to article 11 of chapter
18	18	79 of the Kansas Statutes Annotated, and amendments thereto, or the
19	19	premium tax liability imposed upon an insurance company pursuant to
20	20	K.S.A. 40-252, and amendments thereto, for each qualified development
21	21	for each year of the credit period, in an amount equal to the federal tax
22	22	credit allocated or allowed by the KHRC to such qualified development,
23	23	except that there shall be no reduction in the credit allowable in the first
24	24	year of the credit period due to the calculation in section 42(f)(2) of the
25	25	federal internal revenue code.
26	26	(b) The KHRC shall issue an allocation certificate to an owner of a
27	27	qualified development to which a credit has been allocated. The KHRC
28	28	shall issue an allocation certificate to the qualified development
29	29	simultaneously with issuance of federal form 8609 with respect to the
30	30	federal tax credits.
31	31	(c) All allocations shall be made pursuant to the qualified allocation
32	32	plan.
33	33	(d) If an owner of a qualified development receiving an allocation of
34	34	a credit is a pass-through entity, the owner may allocate the credit among
35	35	its partners or members in any manner agreed to by such persons
36	36	regardless of whether: (1) Any such person is allocated or allowed any
37	37	portion of any federal tax credit with respect to the qualified project; (2)
38	38	the allocation of the credit under the terms of the agreement has substantial
39	39	economic effect within the meaning of section 704(b) of the federal
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75	75	internal revenue code; or (3) any such person is deemed a partner for
76	76	federal income tax purposes, if the partner or member would be considered
77	77	a partner or member under applicable state law governing such entity and
78	78	has been admitted as a partner or member on or prior to the date for filing
79	79	the qualified taxpayer's tax return, including any amendments to such tax
80	80	return, with respect to the year of the credit. In the case of multiple tiers of
81	81	pass-through entities, the credit may be so allocated through any number
82	82	of pass-through entities in any manner agreed by the owners of such pass-
83	83	through entities, none of which shall be considered a transfer. Any pass-
84	84	through entity allocating a credit to its partners or members shall attach a
85	85	pass-through certification to its tax return annually. Each partner or
86	86	member shall be allowed to claim or further allocate such amount subject
87	87	to any restrictions set forth in this act.
88	88	(e) An owner of a qualified development to which a credit has been
89	89	allocated and each qualified taxpayer to which such owner has allocated a
90	90	portion of such credit, if any, shall file with their state income, privilege or
91	91	premium tax return a copy of the allocation certificate issued by the
92	92	KHRC with respect to such qualified development and a copy of any pass-
93	93	through certification, as prescribed by the director.
94	94	(f) No credit shall be allocated pursuant to this act unless the qualified
95	95	development is the subject of a recorded restrictive covenant requiring the
96	96	development to be maintained and operated as a qualified development
97	97	and is in accordance with the accessibility and adaptability requirements of
98	98	the federal tax credits and title VIII of the civil rights act of 1968, as
99	99	amended by the fair housing amendments act of 1988, for a period of 15
100	100	taxable years, or such longer period as may be agreed to between the
101	101	KHRC and the owner of the qualified development, beginning with the
102	102	first taxable year of the credit period.
103	103	(g) The allocated credit amount may be taken against the income,
104	104	privilege or premium taxes imposed for each taxable year of the credit
105	105	period. Any amount of credit that exceeds the income, privilege or
106	106	premium tax liability of a qualified taxpayer for a taxable year may be
107	107	carried forward as a credit against subsequent years' tax liability up to 11
108	108	tax years following the tax year in which the allocation was made and shall
109	109	be applied first to the earliest years possible. Any amount of the credit that
110	110	is not used shall not be refunded to the taxpayer.
111	111	(h) Unless otherwise provided in this act or the context or law
112	112	requires otherwise, the KHRC shall determine eligibility for a credit and
113	113	allocate credits in accordance with the standards and requirements set forth
114	114	in section 42 of the federal internal revenue code. Any combination of
115	115	federal tax credits and credits allowed pursuant to this act shall be the least
116	116	amount necessary to ensure the financial feasibility of a qualified
117	117	development.
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161	161	(i) The provisions of the Kansas affordable housing tax credit act,
162	162	K.S.A. 2024 Supp. 79-32,304 through 79-32,309, and amendments thereto,
163	163	shall be discontinued on July 1, 2025, except that such provisions shall
164	164	continue to apply through the credit period, and any applicable carry
165	165	forward period, of an affordable housing tax credit allocation awarded to
166	166	the owner of a qualified development by the KHRC as provided in
167	167	subsection (b) before July 1, 2025. No allocation of a credit shall be
168	168	awarded by the KHRC as provided in subsection (b) after June 30, 2025.
169	169	Sec. 2. K.S.A. 2024 Supp. 79-32,306 is hereby repealed.
170	170	Sec. 3. This act shall take effect and be in force from and after its
171	171	publication in the statute book.
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