Providing an income tax subtraction modification for sales or taking of property subject to eminent domain.
Impact
If enacted, HB 2189 is poised to significantly impact Kansas tax policy by amending K.S.A. 79-32,117 and repealing the previous version of this statute. The bill enables adjustments for individual taxpayers, creating a more favorable tax scenario for those dealing with property taken through eminent domain. This change aims to provide financial relief to affected individuals, promoting a fairer taxation system that recognizes the extraordinary circumstances faced by these property owners.
Summary
House Bill 2189 addresses the nuances of income taxation in the state of Kansas, specifically focusing on the adjustments made to the Kansas adjusted gross income (KAGI) for individual taxpayers. The bill provides a subtractive modification related to the sale or taking of properties through eminent domain, which could potentially ease the tax burden on individuals affected by such actions. Additionally, it amends existing statutes concerning the inclusion of federal net operating loss carrybacks and the treatment of various other income sources, enhancing clarity and providing relief in certain scenarios.
Contention
Notable points of contention in discussions surrounding HB 2189 may arise from differing opinions on the implications of modifying income taxation rules, particularly regarding those who benefit from the amendments versus those who do not. Some legislators may argue about the fairness and potential revenue impacts these changes could have on state finances. Moreover, the definitions of 'eminent domain' and the circumstances under which modifications apply might lead to debates about clarity and interpretation in legal contexts.
Increasing the income limit for the income tax subtraction modification for social security income and providing that all social security benefits qualify for the subtraction modification commencing in tax year 2026.
Providing an individual income tax credit for certain residential solar and wind energy property expenditures, a subtraction modification to permit the carryforward of certain net operating losses for individuals and a subtraction modification for the federal work opportunity tax credit and the employee retention credit disallowances.
Permitting the carryforward of certain net operating losses for individuals for Kansas income tax purposes and excluding social security payments from household income and increasing the appraised value and household income thresholds for eligibility of seniors and disabled veterans related to increased property tax homestead claims.
Allowing a taxpayer to elect the taxable year in which a subtraction modification for contributions to a 529 program account, ABLE account or first-time home buyer savings account would be applied and authorizing the state treasurer to appoint a 529 program advisory committee.
Enacting the adoption savings account act allowing individuals to establish adoption savings accounts with certain financial institutions, providing eligible expenses, requirements and restrictions for such accounts and establishing addition and subtraction modifications for contributions to such accounts under the Kansas income tax act, increasing the income tax credit amount for adoption expenses, establishing an income, privilege and premium tax credit for contributions to eligible charitable organizations operating pregnancy centers or residential maternity facilities and providing for a sales tax exemption for purchases by pregnancy resource centers and residential maternity facilities.