HOUSE BILL No. 2231
AN ACT concerning income taxation; relating to personal exemptions; providing an
additional personal exemption for head of household tax filers; increasing the
personal exemption for certain disabled veterans; relating to homestead property tax
refund claims; modifying the definition of household income; relating to income and
privilege taxes; 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; relating to property taxation; providing exemptions
for certain personal property including watercraft, marine equipment, off-road
vehicles, motorized bicycles and certain trailers; amending K.S.A. 79-213, 79-1129,
79-3279, 79-3287, 79-4301 and 79-5501 and K.S.A. 2024 Supp. 79-32,110, 79-
32,113, 79-32,121 and 79-4508a and repealing the existing sections.
Be it enacted by the Legislature of the State of Kansas:
New Section 1. (a) At the end of fiscal year 2028, the director of
the budget, in consultation with the director of legislative research,
shall certify the amount of actual corporate income tax receipt revenues
generated pursuant to K.S.A. 79-32,110(c), and amendments thereto,
that is in excess of the prior fiscal year's corporate income tax receipts.
The director of the budget shall transmit such certification to the
secretary of revenue. Upon receipt of such certification, the secretary
shall compute the reduction of the corporate income tax rate pursuant to
K.S.A. 79-32,110(c), and amendments thereto. The certified amount
shall be computed in dollars by the secretary for a reduction rounded
down to the nearest 0.1% in the corporate income tax rate, if any, to go
into effect for the next tax year that would reduce the corporate income
tax rate in an amount approximately equal to the amount computed by
the secretary. The secretary shall reduce the normal tax on corporations.
Such rate reductions shall remain in effect unless further reduced
pursuant to law.
(b) The secretary shall publish by October 1, 2028, the new
income tax rates to take effect for all taxable years commencing after
December 31, 2028.
New Sec. 2. (a) The following described property, to the extent
herein specified, is hereby exempt from all property or ad valorem
taxes levied under the laws of the state of Kansas:
(1) Any off-road vehicle that is not operated upon any highway;
(2) any motorized bicycle, electric-assisted bicycle, electric-
assisted scooter, electric personal assistive mobility device and
motorized wheelchair as such terms are defined in K.S.A. 8-126, and
amendments thereto;
(3) any trailer having a gross weight of 15,000 pounds or less that
is used exclusively for personal use and not for the production of
income; and
(4) any marine equipment.
(b) For purposes of this section:
(1) "Marine equipment" means any watercraft trailer designed to
launch, retrieve, transport and store watercraft and any watercraft motor
designed to operate watercraft on the water;
(2) "off-road motorcycle" means any motorcycle as defined in
K.S.A. 8-126, and amendments thereto, that has been manufactured for
off-road use only and is used exclusively off roads and highways; and
(3) "off-road vehicle" means:
(A) Any all-terrain vehicle, recreational off-highway vehicle and
golf cart as such terms are defined in K.S.A. 8-126, and amendments
thereto; and
(B) any off-road motorcycle and snowmobile.
(c) The provisions of this section shall apply to all taxable years
commencing after December 31, 2025.
Sec. 3. K.S.A. 79-213 is hereby amended to read as follows: 79-
213. (a) Any property owner requesting an exemption from the
payment of ad valorem property taxes assessed, or to be assessed, HOUSE BILL No. 2231—page 2
against their property shall be required to file an initial request for
exemption, on forms approved by the state board of tax appeals and
provided by the county appraiser.
(b) The initial exemption request shall identify the property for
which the exemption is requested and state, in detail, the legal and
factual basis for the exemption claimed.
(c) The request for exemption shall be filed with the county
appraiser of the county where such property is principally located.
(d) After a review of the exemption request, and after a
preliminary examination of the facts as alleged, the county appraiser
shall recommend that the exemption request either be granted or
denied, and, if necessary, that a hearing be held. If a denial is
recommended, a statement of the controlling facts and law relied upon
shall be included on the form.
(e) The county appraiser, after making such written
recommendation, shall file the request for exemption and the
recommendations of the county appraiser with the state board of tax
appeals. With regard to a request for exemption from property tax
pursuant to the provisions of K.S.A. 79-201g and 82a-409, and
amendments thereto, not filed with the board of tax appeals by the
county appraiser on or before the effective date of this act, if the county
appraiser recommends the exemption request be granted, the exemption
shall be provided in the amount recommended by the county appraiser
and the county appraiser shall not file the request for exemption and
recommendations of the county appraiser with the state board of tax
appeals. The county clerk or county assessor shall annually make such
adjustment in the taxes levied against the real property as the owner
may be entitled to receive under the provisions of K.S.A. 79-201g, and
amendments thereto, as recommended by the county appraiser,
beginning with the first period, following the date of issue of the
certificate of completion on which taxes are regularly levied, and
during the years which the landowner is entitled to such adjustment.
(f) Upon receipt of the request for exemption, the board shall
docket the same and notify the applicant and the county appraiser of
such fact.
(g) After examination of the request for exemption and the county
appraiser's recommendation related thereto, the board may fix a time
and place for hearing, and shall notify the applicant and the county
appraiser of the time and place so fixed. A request for exemption
pursuant to: (1) Section 13 of article 11 of the constitution of the state
of Kansas; or (2) K.S.A. 79-201a Second, and amendments thereto, for
property constructed or purchased, in whole or in part, with the
proceeds of revenue bonds under the authority of K.S.A. 12-1740
through 12-1749, and amendments thereto, prepared in accordance with
instructions and assistance which shall be provided by the department
of commerce, shall be deemed approved unless scheduled for hearing
within 30 days after the date of receipt of all required information and
data relating to the request for exemption, and such hearing shall be
conducted within 90 days after such date. Such time periods shall be
determined without regard to any extension or continuance allowed to
either party to such request. In any case where a party to such request
for exemption requests a hearing thereon, the same shall be granted.
Hearings shall be conducted in accordance with the provisions of the
Kansas administrative procedure act. In all instances where the board
sets a request for exemption for hearing, the county shall be represented
by its county attorney or county counselor.
(h) Except as otherwise provided by subsection (g), in the event of
a hearing, the same shall be originally set not later than 90 days after
the filing of the request for exemption with the board.
(i) During the pendency of a request for exemption, no person,
firm, unincorporated association, company or corporation charged with
real estate or personal property taxes pursuant to K.S.A. 79-2004 and
79-2004a, and amendments thereto, on the tax books in the hands of the
county treasurer shall be required to pay the tax from the date the HOUSE BILL No. 2231—page 3
request is filed with the county appraiser until the expiration of 30 days
after the board issued its order thereon and the same becomes a final
order. In the event that taxes have been assessed against the subject
property, no interest shall accrue on any unpaid tax for the year or years
in question nor shall the unpaid tax be considered delinquent from the
date the request is filed with the county appraiser until the expiration of
30 days after the board issued its order thereon. In the event the board
determines an application for exemption is without merit and filed in
bad faith to delay the due date of the tax, the tax shall be considered
delinquent as of the date the tax would have been due pursuant to
K.S.A. 79-2004 and 79-2004a, and amendments thereto, and interest
shall accrue as prescribed therein.
(j) In the event the board grants the initial request for exemption,
the same shall be effective beginning with the date of first exempt use
except that, with respect to property the construction of which
commenced not to exceed 24 months prior to the date of first exempt
use, the same shall be effective beginning with the date of
commencement of construction.
(k) In conjunction with its authority to grant exemptions, the board
shall have the authority to abate all unpaid taxes that have accrued from
and since the effective date of the exemption. In the event that taxes
have been paid during the period where the subject property has been
determined to be exempt, the board shall have the authority to order a
refund of taxes for the year immediately preceding the year in which
the exemption application is filed in accordance with subsection (a).
(l) The provisions of this section shall not apply to: (1) Farm
machinery and equipment exempted from ad valorem taxation by
K.S.A. 79-201j, and amendments thereto; (2) personal property
exempted from ad valorem taxation by K.S.A. 79-215, and
amendments thereto; (3) wearing apparel, household goods and
personal effects exempted from ad valorem taxation by K.S.A. 79-
201c, and amendments thereto; (4) livestock; (5) all property exempted
from ad valorem taxation by K.S.A. 79-201d, and amendments thereto;
(6) merchants' and manufacturers' inventories exempted from ad
valorem taxation by K.S.A. 79-201m, and amendments thereto; (7)
grain exempted from ad valorem taxation by K.S.A. 79-201n, and
amendments thereto; (8) property exempted from ad valorem taxation
by K.S.A. 79-201a Seventeenth, and amendments thereto, including all
property previously acquired by the secretary of transportation or a
predecessor in interest, which is used in the administration,
construction, maintenance or operation of the state system of highways.
The secretary of transportation shall at the time of acquisition of
property notify the county appraiser in the county in which the property
is located that the acquisition occurred and provide a legal description
of the property acquired; (9) property exempted from ad valorem
taxation by K.S.A. 79-201a Ninth, and amendments thereto, including
all property previously acquired by the Kansas turnpike authority
which is used in the administration, construction, maintenance or
operation of the Kansas turnpike. The Kansas turnpike authority shall at
the time of acquisition of property notify the county appraiser in the
county in which the property is located that the acquisition occurred
and provide a legal description of the property acquired; (10)
aquaculture machinery and equipment exempted from ad valorem
taxation by K.S.A. 79-201j, and amendments thereto. As used in this
section, "aquaculture" has the same meaning ascribed thereto by K.S.A.
47-1901, and amendments thereto; (11) Christmas tree machinery and
equipment exempted from ad valorem taxation by K.S.A. 79-201j, and
amendments thereto; (12) property used exclusively by the state or any
municipality or political subdivision of the state for right-of-way
purposes. The state agency or the governing body of the municipality
or political subdivision shall at the time of acquisition of property for
right-of-way purposes notify the county appraiser in the county in
which the property is located that the acquisition occurred and provide
a legal description of the property acquired; (13) machinery, equipment, HOUSE BILL No. 2231—page 4
materials and supplies exempted from ad valorem taxation by K.S.A.
79-201w, and amendments thereto; (14) vehicles owned by the state or
by any political or taxing subdivision thereof and used exclusively for
governmental purposes; (15) property used for residential purposes
which is exempted pursuant to K.S.A. 79-201x, and amendments
thereto, from the property tax levied pursuant to K.S.A. 72-5142, and
amendments thereto; (16) from and after July 1, 1998, vehicles which
are owned by an organization having as one of its purposes the
assistance by the provision of transit services to the elderly and to
disabled persons and which are exempted pursuant to K.S.A. 79-201
Ninth, and amendments thereto; (17) from and after July 1, 1998, motor
vehicles exempted from taxation by K.S.A. 79-5107(e), and
amendments thereto; (18) commercial and industrial machinery and
equipment exempted from property or ad valorem taxation by K.S.A.
79-223, and amendments thereto; (19) telecommunications machinery
and equipment and railroad machinery and equipment exempted from
property or ad valorem taxation by K.S.A. 79-224, and amendments
thereto; (20) property exempted from property or ad valorem taxation
by K.S.A. 79-234, and amendments thereto; (21) recreational vehicles
exempted from property or ad valorem taxation by K.S.A. 79-5121(e),
and amendments thereto; (22) property acquired by a land bank exempt
from property or ad valorem taxation pursuant to K.S.A. 12-5909 or
K.S.A. 19-26,111, and amendments thereto; and (23) property
belonging exclusively to the United States and exempted from ad
valorem taxation by K.S.A. 79-201a First, and amendments thereto,
except that the provisions of this subsection (l)(23) shall not apply to
any such property that the congress of the United States has expressly
declared to be subject to state and local taxation; (24) watercraft
exempted from property or ad valorem taxation by K.S.A. 79-5501, and
amendments thereto; and (25) property exempted from property or ad
valorem taxation by section 2, and amendments thereto.
(m) The provisions of this section shall apply to property exempt
pursuant to the provisions of section 13 of article 11 of the constitution
of the state of Kansas.
(n) The provisions of subsection (k) as amended by this act shall
be applicable to all exemption applications filed in accordance with
subsection (a) after December 31, 2001.
(o) No exemption authorized by K.S.A. 79-227, and amendments
thereto, of property from the payment of ad valorem property taxes
assessed shall be granted unless the requesting property owner files an
initial request for exemption pursuant to this section within two years
of the date in which construction of a new qualifying pipeline property
began. The provisions of this subsection shall be applicable to all
requests for exemptions filed in accordance with subsection (a) after
June 30, 2017.
Sec. 4. K.S.A. 79-1129 is hereby amended to read as follows: 79-
1129. (a) Except as otherwise specifically provided, a financial
institution whose business activity is taxable both within and without
this state shall allocate and apportion its net income as provided in this
act. All items of nonbusiness income, income which is not includable in
the apportionable income tax base, shall be allocated pursuant to the
provisions of K.S.A. 79-3274 through 79-3278 and amendments
thereto. A financial institution organized under the laws of a foreign
country, the commonwealth of Puerto Rico, or a territory or possession
of the United States whose effectively connected income, as defined
under the federal internal revenue code, is taxable both within this state
and within another state, other than the state in which it is organized,
shall allocate and apportion its net income as provided in this act and its
apportionment factors shall include the part of its property, payroll and
receipts that is related to its apportionable income.
(b) (1) For taxable years commencing prior to January 1, 2027,
all business income shall be apportioned as follows:
All business income, income which is includable in the
apportionable income tax base, shall be apportioned to this state by HOUSE BILL No. 2231—page 5
multiplying such income by the apportionment percentage. The
apportionment percentage is determined by adding the taxpayer's
receipts factor, as described in K.S.A. 79-1130, and amendments
thereto, property factor, as described in K.S.A. 79-1131, and
amendments thereto, and payroll factor, as described in K.S.A. 79-
1132, and amendments thereto, together and dividing the sum by three.
If one of the factors is missing, the two remaining factors are added and
the sum is divided by two. If two of the factors are missing, the
remaining factor is the apportionment percentage. A factor is missing if
both its numerator and denominator are zero, but it is not missing
merely because its numerator is zero.
(2) For tax years commencing on or after January 1, 2027, all
business income shall be apportioned to this state by multiplying the
business income by the receipts factor.
(c) Each factor shall be computed according to the method of
accounting, cash or accrual basis, used by the taxpayer for the taxable
year.
(d) If the allocation and apportionment provisions of this act do
not fairly represent the extent of the taxpayer's business activity in this
state, the taxpayer may petition for or the secretary of revenue may
require, in respect to all or any part of the taxpayer's business activity,
if reasonable:
(1) Separate accounting;
(2) the exclusion of any one or more of the factors;
(3) the inclusion of one or more additional factors which will
fairly represent the taxpayer's business activity in this state; or
(4) the employment of any other method to effectuate an equitable
allocation and apportionment of the taxpayer's income.
(e) In the event a combined report is utilized to determine the
Kansas income attributable to a unitary group of financial institutions,
the financial institutions in the combined group shall include only those
institutions which have a branch or office in Kansas.
(f) (1) There shall be allowed as a deduction an amount computed
in accordance with this subsection.
(2) As of July 1, 2025, only publicly traded companies, including
affiliated corporations participating in the filing of a publicly traded
company's financial statements prepared in accordance with generally
accepted accounting principles, shall be eligible for this deduction.
(3) If the provisions of this section result in an aggregate increase
in the taxpayer's net deferred tax liability or an aggregate decrease in
the taxpayer's net deferred tax asset, or an aggregate change from a
net deferred tax asset to a net deferred tax liability, the taxpayer shall
be entitled to a deduction, as determined in this subsection. For the
purposes of this section, the term "taxpayer" includes a unitary group
of businesses that is required to file a combined report. The deferred
tax impact deduction provided under this section for a unitary group of
businesses that is required to file a combined report shall be calculated
using unitary net deferred tax assets and liabilities and deducted
against unitary group income.
(4) A taxpayer shall be entitled to a deferred tax impact deduction
from the taxpayer's net business income before apportionment equal to
the amount necessary to offset the increase in the net deferred tax
liability or decrease in the net deferred tax asset, or aggregate change
from a net deferred tax asset to a net deferred tax liability. Such
increase in the net deferred tax liability, decrease in the net deferred
tax asset or the aggregate change from a net deferred tax asset to a net
deferred tax liability shall be computed based on the change that would
result from the imposition of the single sales factor requirements
pursuant to this section, excluding the deduction provided under this
paragraph, as of the end of the tax year prior to tax year 2025. The
amount of the deduction shall equal the annual deferred tax deduction
amount set forth in paragraph (5).
(5) The annual deferred tax deduction amount shall be calculated
as follows: HOUSE BILL No. 2231—page 6
(A) The deferred tax impact determined in paragraph (4) shall be
divided by the privilege tax rate in effect for the tax year pursuant to
K.S.A. 79-1107 and 79-1108, and amendments thereto;
(B) the resulting amount shall be further divided by the Kansas
apportionment factor that was used by the taxpayer in the calculation
of the deferred tax assets and deferred tax liabilities as provided in this
subsection; and
(C) the result multiplied by
1
/10 shall represent the total net
deferred tax deduction available for the first tax year beginning on or
after January 1, 2035, and the next nine successive tax years.
(6) The deduction calculated under paragraph (5) shall not be
adjusted as a result of any events subsequent to such calculation,
including, but not limited to, any disposition or abandonment of assets.
Such deduction shall be calculated without regard to any tax liabilities
under the federal internal revenue code and shall not alter the tax basis
of any asset. If the deduction under this section is greater than the
taxpayer's net business income before apportionment, any excess
deduction shall be carried forward and applied as a deduction for
future tax years until fully utilized.
(7) At the discretion of the taxpayer, the taxpayer shall be allowed
to claim other available tax credits before claiming the deferred tax
deduction calculated under this section. Any deferred tax deduction
calculated under this section not claimed on a return shall be carried
forward and applied as a deduction for future tax years until fully
utilized.
(8) Any taxpayer intending to claim a deduction under this
subsection shall file a statement with the secretary on or before July 1,
2027, specifying the total amount of the deduction that the taxpayer
claims. The statement shall be made on such form and in such manner
as prescribed by the secretary and shall contain such information or
calculations as the secretary may specify. No deduction shall be
allowed under this section for any taxable year except to the extent
claimed in the manner prescribed on or before July 1, 2027.
(9) For purposes of this subsection:
(A) "Net deferred tax liability" means deferred tax liabilities that
exceed the deferred tax assets of the taxpayer, as computed in
accordance with generally accepted accounting principles.
(B) "Net deferred tax asset" means that deferred tax assets exceed
the deferred tax liabilities of the taxpayer, as computed in accordance
with generally accepted accounting principles.
Sec. 5. K.S.A. 79-3279 is hereby amended to read as follows: 79-
3279. (a) For tax years commencing before January 1, 2027, all
business income of railroads and interstate motor carriers of persons or
property for-hire for hire shall be apportioned to this state by
multiplying the business income by a fraction, in the case of railroads,
the numerator of which is the freight car miles in this state and the
denominator of which is the freight car miles everywhere, and, in the
case of interstate motor carriers, the numerator of which is the total
number of miles operated in this state and the denominator of which is
the total number of miles operated everywhere.
(b) For tax years commencing before January 1, 2027, all
business income of any other taxpayer shall be apportioned to this state
by one of the following methods:
(1) By multiplying the business income by a fraction, the
numerator of which is the property factor plus the payroll factor plus
the sales factor, and the denominator of which is three; or
(2) at the election of a qualifying taxpayer, by multiplying the
business income by a fraction, the numerator of which is the property
factor plus the sales factor, and the denominator of which is two.
(A) For purposes of this subsection (b)(2), a qualifying taxpayer is
any taxpayer whose payroll factor for a taxable year exceeds 200% of
the average of the property factor and the sales factor. Whenever two or
more corporations are engaged in a unitary business and required to file
a combined report, the fraction comparison provided by this subsection HOUSE BILL No. 2231—page 7
(b)(2) shall be calculated by using the payroll factor, property factor
and sales factor of the combined group of unitary corporations.
(B) An election under this subsection (b)(2) shall be made by
including a statement with the original tax return indicating that the
taxpayer elects to apply the apportionment method under this
subsection (b)(2). The election shall be effective and irrevocable for the
taxable year of the election and the following nine taxable years. The
election shall be binding on all members of a unitary group of
corporations. Notwithstanding the above, the secretary of revenue may
upon the request of the taxpayer, grant permission to terminate the
election under this subsection (b)(2) prior to expiration of the ten-year
period.
(3) At the election of a qualifying telecommunications company,
by multiplying the business income by a fraction, the numerator of
which is the information carrying capacity of wire and fiber optic cable
available for use in this state, and the denominator of which is the
information carrying capacity of wire and fiber optic cable available for
use everywhere during the tax year.
(A) For purposes of this subsection (b)(3), a qualifying
telecommunications company is a telecommunications company that is
a qualifying taxpayer under paragraph (A) of subsection (b)(2) (b)(2)
(A).
(B) A qualifying telecommunications company shall make the
election under this subsection (b)(3) paragraph in the same manner as
provided under paragraph (B) of subsection (b)(2) (b)(2)(B).
(4) At the election of a distressed area taxpayer, by multiplying the
business income by the sales factor. The election shall be made by
including a statement with the original tax return indicating that the
taxpayer elects to apply this apportionment method. The election may
be made only once, it must be made on or before December 31, 1999
and it shall be effective for the taxable year of the election and the
following nine taxable years for so long as the taxpayer maintains the
payroll amount prescribed by subsection (j) of K.S.A. 79-3271(j), and
amendments thereto.
(5) At the election of the taxpayer made at the time of filing of the
original return, the qualifying business income of any investment funds
service corporation organized as a corporation or S corporation which
maintains its primary headquarters and operations or is a branch facility
that employs at least 100 individuals on a full-time equivalent basis in
this state and has any investment company fund shareholders
residenced in this state shall be apportioned to this state as provided in
this subsection, as follows:
(A) By multiplying the investment funds service corporation's
qualifying business income from administration, distribution and
management services provided to each investment company by a
fraction, the numerator of which shall be the average of the number of
shares owned by the investment company's fund shareholders
residenced in this state at the beginning of and at the end of the
investment company's taxable year that ends with or within the
investment funds service corporation's taxable year, and the
denominator of which shall be the average of the number of shares
owned by the investment company's fund shareholders everywhere at
the beginning of and at the end of the investment company's taxable
year that ends with or within the investment funds service corporation's
taxable year.
(B) A separate computation shall be made to determine the
qualifying business income from each fund of each investment
company. The qualifying business income from each investment
company shall be multiplied by the fraction calculated pursuant to
paragraph (A) for each fund of such investment company.
(C) The qualifying portion of total business income of an
investment funds service corporation shall be determined by
multiplying such total business income by a fraction, the numerator of
which is the gross receipts from the provision of management, HOUSE BILL No. 2231—page 8
distribution and administration services to or on behalf of an
investment company, and the denominator of which is the gross
receipts of the investment funds service company. To the extent an
investment funds service corporation has business income that is not
qualifying business income, such business income shall be apportioned
to this state pursuant to subsection (b)(1).
(D) For tax year 2002, the tax liability of an investment funds
service corporation that has elected to apportion its business income
pursuant to paragraph (5) shall be increased by an amount equal to 50%
of the difference of the amount of such tax liability if determined
pursuant to subsection (b)(1) less the amount of such tax liability
determined with regard to paragraph (5).
(E) When an investment funds service corporation is part of a
unitary group, the business income of the unitary group attributable to
the investment funds service corporation shall be determined by
multiplying the business income of the unitary group by a fraction, the
numerator of which is the property factor plus the payroll factor plus
the sales factor, and the denominator of which is three. The property
factor is a fraction, the numerator of which is the average value of the
investment funds service corporation's real and tangible personal
property owned or rented and used during the tax period and the
denominator of which is the average value of the unitary group's real
and tangible personal property owned or rented and used during the tax
period. The payroll factor is a fraction, the numerator of which is the
total amount paid during the tax period by the investment funds service
corporation for compensation, and the denominator of which is the total
compensation paid by the unitary group during the tax period. The sales
factor is a fraction, the numerator of which is the total sales of the
investment funds service corporation during the tax period, and the
denominator of which is the total sales of the unitary group during the
tax period.
(F) A taxpayer seeking to make the election available pursuant to
subsection (b)(5) of K.S.A. 79-3279, and amendments thereto, shall
only be eligible to continue to make such election if the taxpayer
maintains at least 95% of the Kansas employees in existence at the time
the taxpayer first makes such an election.
(6) At the election of a qualifying taxpayer, by multiplying such
taxpayer's business income by the sales factor. The election shall be
made by including a statement with the original tax return indicating
that the taxpayer elects to apply this apportionment method. The
election may be made only once and must be made on or before the last
day of the taxable year during which the investment described in
paragraph (A) is placed in service, but not later than December 31,
2009, and it shall be effective for the taxable year of the election and
the following nine taxable years or for so long as the taxpayer
maintains the wage requirements set forth in paragraph (A). If the
qualifying taxpayer is a member of a unitary group of corporations, all
other members of the unitary group doing business within this state
shall apportion their business income to this state pursuant to
subsection (b)(1).
(A) For purposes of this subsection, a qualifying taxpayer is any
taxpayer making an investment of $100,000,000 for construction in
Kansas of a new business facility identified under the North American
industry classification system (NAICS) subsectors of 31-33, as
assigned by the secretary of the department of labor, employing 100 or
more new employees at such facility after July 1, 2007, and prior to
December 31, 2009, and meeting the following requirements for paying
such employees higher-than-average wages within the wage region for
such facility:
(i) The taxpayer's new Kansas business facility with 500 or fewer
full-time equivalent employees will provide an average wage that is
above the average wage paid by all Kansas business facilities that share
the same assigned NAICS category used to develop wage thresholds
and that have reported 500 or fewer employees to the Kansas HOUSE BILL No. 2231—page 9
department of labor on the quarterly wage reports;
(ii) the taxpayer's new Kansas business facility with 500 or fewer
full-time equivalent employees is the sole facility within its assigned
NAICS category that has reported wages for 500 or fewer employees to
the Kansas department of labor on the quarterly wage reports;
(iii) the taxpayer's new Kansas business facility with more than
500 full-time equivalent employees will provide an average wage that
is above the average wage paid by all Kansas business facilities that
share the same assigned NAICS category used to develop wage
thresholds and that have reported more than 500 employees to the
Kansas department of labor on the quarterly wage reports;
(iv) the taxpayer's new Kansas business facility with more than
500 full-time equivalent employees is the sole facility within its
assigned NAICS category that has reported wages for more than 500
employees to the Kansas department of labor on the quarterly wage
reports, in which event it shall either provide an average wage that is
above the average wage paid by all Kansas business facilities that share
the same assigned NAICS category and that have reported wages for
500 or fewer employees to the Kansas department of labor on the
quarterly wage reports, or be the sole Kansas business facility within its
assigned NAICS category that has reported wages to the Kansas
department of labor on the quarterly wage reports;
(v) the number of NAICS digits to use in developing each set of
wage thresholds for comparison purposes shall be determined by the
secretary of commerce;
(vi) the composition of wage regions used in connection with each
set of wage thresholds shall be determined by the secretary of
commerce; and
(vii) alternatively, a taxpayer may wage-qualify its new Kansas
business facility if, after excluding the headcount and wages reported
on the quarterly wage reports to the Kansas department of labor for
employees at that new Kansas business facility who own five percent
or more equity in the taxpayer, the average wage calculated for the
taxpayer's new Kansas business facility is greater than or equal to 1.5
times the aggregate state-wide average wage paid by industries covered
by the employment security law based on data maintained by the
secretary of labor.
(B) For the purposes of the wage requirements in paragraph (A),
the number of full-time equivalent employees shall be determined by
dividing the number of hours worked by part-time employees during
the pertinent measurement interval by an amount equal to the
corresponding multiple of a 40-hour work week and adding the
quotient to the average number of full-time employees.
(C) When the qualifying taxpayer is part of a unitary group, the
business income of the unitary group attributable to the qualifying
taxpayer shall be determined by multiplying the business income of the
unitary group by a fraction, the numerator of which is the property
factor plus the payroll factor plus the sales factor, and the denominator
of which is three. The property factor is a fraction, the numerator of
which is the average value of the qualifying taxpayer's real and tangible
personal property owned or rented and used during the tax period and
the denominator of which is the average value of the unitary group's
real and tangible personal property owned or rented and used during
the tax period. The payroll factor is a fraction, the numerator of which
is the total amount paid during the tax period by the qualifying taxpayer
for compensation, and the denominator of which is the total
compensation paid by the unitary group during the tax period. The sales
factor is a fraction, the numerator of which is the total sales of the
qualifying taxpayer during the tax period, and the denominator of
which is the total sales of the unitary group during the tax period.
(D) For purposes of this subsection, the secretary of revenue, upon
a showing of good cause and after receiving a certification by the
secretary of commerce of substantial compliance with provisions of this
subsection (b)(6), may extend any required performance date provided HOUSE BILL No. 2231—page 10
in this subsection (b)(6) for a period not to exceed six months.
(c) For tax years commencing on or after January 1, 2027, all
business income shall be apportioned to this state by multiplying the
business income by the sales factor.
(d) Any taxpayer having previously made an election pursuant to
subsection (b)(2) shall be permitted to apportion income through the
use of the single sales factor.
(e) (1) There shall be allowed as a deduction an amount computed
in accordance with this subsection.
(2) As of July 1, 2025, only publicly traded companies, including
affiliated corporations participating in the filing of a publicly traded
company's financial statements prepared in accordance with generally
accepted accounting principles, shall be eligible for this deduction.
(3) If the provisions of this section result in an aggregate increase
in the taxpayer's net deferred tax liability or an aggregate decrease in
the taxpayer's net deferred tax asset, or an aggregate change from a
net deferred tax asset to a net deferred tax liability, the taxpayer shall
be entitled to a deduction, as determined in this subsection. For the
purposes of this section, the term "taxpayer" includes a unitary group
of businesses that is required to file a combined report. The deferred
tax impact deduction provided under this section for a unitary group of
businesses that is required to file a combined report shall be calculated
using unitary net deferred tax assets and liabilities and deducted
against unitary group income.
(4) A taxpayer shall be entitled to a deferred tax impact deduction
from the taxpayer's net business income before apportionment equal to
the amount necessary to offset the increase in the net deferred tax
liability or decrease in the net deferred tax asset, or aggregate change
from a net deferred tax asset to a net deferred tax liability. Such
increase in the net deferred tax liability, decrease in the net deferred
tax asset or the aggregate change from a net deferred tax asset to a net
deferred tax liability shall be computed based on the change that would
result from the imposition of the single sales factor requirements
pursuant to this section, excluding the deduction provided under this
paragraph, as of the end of the tax year prior to tax year 2025. The
amount of the deduction shall equal the annual deferred tax deduction
amount set forth in paragraph (5).
(5) The annual deferred tax deduction amount shall be calculated
as follows:
(A) The deferred tax impact determined in paragraph (4) shall be
divided by the income tax rate for corporations in effect for the tax
year pursuant to K.S.A. 79-32,110, and amendments thereto;
(B) the resulting amount shall be further divided by the Kansas
apportionment factor that was used by the taxpayer in the calculation
of the deferred tax assets and deferred tax liabilities as provided in this
subsection; and
(C) the result multiplied by
1
/10 shall represent the total net
deferred tax deduction available for the first tax year beginning on or
after January 1, 2035, and the next nine successive tax years.
(6) The deduction calculated under paragraph (5) shall not be
adjusted as a result of any events subsequent to such calculation,
including, but not limited to, any disposition or abandonment of assets.
Such deduction shall be calculated without regard to any tax liabilities
under the federal internal revenue code and shall not alter the tax basis
of any asset. If the deduction under this section is greater than the
taxpayer's net business income before apportionment, any excess
deduction shall be carried forward and applied as a deduction for
future tax years until fully utilized.
(7) At the discretion of the taxpayer, the taxpayer shall be allowed
to claim other available tax credits before claiming the deferred tax
deduction calculated under this section. Any deferred tax deduction
calculated under this section not claimed on a return shall be carried
forward and applied as a deduction for future tax years until fully
utilized. HOUSE BILL No. 2231—page 11
(8) Any taxpayer intending to claim a deduction under this
subsection shall file a statement with the secretary on or before July 1,
2027, specifying the total amount of the deduction that the taxpayer
claims on such form and in such manner as prescribed by the secretary
and shall contain such information or calculations as the secretary
may specify. No deduction shall be allowed under this section for any
taxable year except to the extent claimed in the manner prescribed on
or before July 1, 2027.
(9) For purposes of this subsection:
(A) "Net deferred tax liability" means deferred tax liabilities that
exceed the deferred tax assets of the taxpayer, as computed in
accordance with generally accepted accounting principles.
(B) "Net deferred tax asset" means that deferred tax assets exceed
the deferred tax liabilities of the taxpayer, as computed in accordance
with generally accepted accounting principles.
(f) Any manufacturer of alcoholic liquor as defined in K.S.A. 41-
102, and amendments thereto, who sells to a distributor as defined in
K.S.A. 41-102, and amendments thereto, shall be apportioned to this
state by multiplying the business income by a fraction, the numerator
of which is the property factor plus the payroll factor and the sales
factor, and the denominator of which is three.
Sec. 6. K.S.A. 79-3287 is hereby amended to read as follows: 79-
3287. Sales, other than sales of tangible personal property, are in this
state if:
(a) the income-producing activity is performed in this state; or
(b) the income-producing activity is performed both in and outside
this state and a greater proportion of the income-producing activity is
performed in this state than in any other state, based on costs of
performance For tax years commencing before January 1, 2027:
(1) The income-producing activity is performed in this state; or
(2) the income-producing activity is performed both in and outside
this state and a greater proportion of the income-producing activity is
performed in this state than in any other state, based on costs of
performance; and
(b) for tax years commencing after December 31, 2026, the
taxpayer's market for the sales is in this state. The taxpayer's market
for the sales is in this state if:
(1) In the case of sale of a service, if and to the extent that the
service is delivered to a location in this state;
(2) in the case of intangible property, such property is:
(A) Rented, leased or licensed, if and to the extent that the
property is used in this state, if that intangible property utilized in
marketing a good or service to a consumer is used in this state,
provided that such good or service is purchased by a consumer who is
in this state; or
(B) that is sold, if and to the extent the property is used in this
state, if:
(i) A contract right, government license or similar intangible
property that authorizes the holder to conduct a business activity in a
specific geographic area is used in this state if the geographic area
includes all or part of this state; or
(ii) net gains from intangible property sales that are contingent on
the productivity, use or disposition of the intangible property shall be
treated as receipts from the rental, lease or licensing of such intangible
property under paragraph (2)(A);
(3) in the case of interest from a loan:
(A) Secured by real property, if and to the extent the property is
located in this state; or
(B) not secured by real property, if and to the extent the borrower
is located in this state; or
(c) in the case of dividends, if and to the extent the payor's
commercial domicile is located in this state.
(d) If the state or states of assignment of receipts under subsection
(a)(1) or (2) cannot be determined, the state or states of assignment HOUSE BILL No. 2231—page 12
shall be reasonably approximated. If the state or states of assignment
of receipts or net gains cannot be reasonably approximated, such
assignment of receipts shall be excluded from the denominator of the
sales factor.
(e) Notwithstanding the provisions of this section, a
communications service provider may assign sales, other than sales of
tangible personal property, to this state pursuant to this section as it
applied to tax years commencing before January 1, 2027.
(f) For purposes of this subsection:
(A) "Communications service" means telecommunications service
as defined in K.S.A. 79-3602, and amendments thereto, internet access
as defined in section 1105(5) of the internet tax freedom act, 47 U.S.C.
§ 151, note, and cable service as defined in 47 U.S.C. § 522(6), or any
combination thereof.
(B) "Communications service provider" means any person,
corporation, partnership or other entity that provides communications
service in this state.
Sec. 7. K.S.A. 2024 Supp. 79-32,110 is hereby amended to read as
follows: 79-32,110. (a) Resident individuals. Except as otherwise
provided by K.S.A. 79-3220(a), and amendments thereto, a tax is
hereby imposed upon the Kansas taxable income of every resident
individual, which tax shall be computed in accordance with the
following tax schedules:
(1) Married individuals filing joint returns.
(A) For tax years 2018 through 2023:
If the taxable income is: The tax is:
Not over $30,000....................................3.1% of Kansas taxable
income
Over $30,000 but not over $60,000........$930 plus 5.25% of excess
over $30,000
Over $60,000..........................................$2,505 plus 5.7% of excess
over $60,000
(B) For tax year 2024, and all tax years thereafter:
If the taxable income is: The tax is:
Not over $46,000....................................5.2% of Kansas taxable
income
Over $46,000..........................................$2,392 plus 5.58% of excess
over $46,000
(2) All other individuals.
(A) For tax years 2018 through 2023:
If the taxable income is:The tax is:
Not over $15,000....................................3.1% of Kansas taxable
income
Over $15,000 but not over $30,000........$465 plus 5.25% of excess
over $15,000
Over $30,000..........................................$1,252.50 plus 5.7% of excess
over $30,000
(B) For tax year 2024, and all tax years thereafter:
If the taxable income is:..........................The tax is:
Not over $23,000....................................5.2% of Kansas taxable
income
Over $23,000..........................................$1,196 plus 5.58% of excess
over $23,000
(b) Nonresident individuals. A tax is hereby imposed upon the
Kansas taxable income of every nonresident individual, which tax shall
be an amount equal to the tax computed under subsection (a) as if the
nonresident were a resident multiplied by the ratio of modified Kansas
source income to Kansas adjusted gross income.
(c) Corporations. A tax is hereby imposed upon the Kansas
taxable income of every corporation doing business within this state or
deriving income from sources within this state. Such tax shall consist of
a normal tax and a surtax and shall be computed as follows unless
otherwise modified pursuant to K.S.A. 2024 Supp. 74-50,321 and
section 1, and amendments thereto: HOUSE BILL No. 2231—page 13
(1) The normal tax shall be in an amount equal to 4% of the
Kansas taxable income of such corporation; and
(2) the surtax shall be in an amount equal to 3% of the Kansas
taxable income of such corporation in excess of $50,000.
(d) Fiduciaries. A tax is hereby imposed upon the Kansas taxable
income of estates and trusts at the rates provided in subsection (a)(2).
(e) Notwithstanding the provisions of subsections (a) and (b), for
tax years 2018 through 2023, married individuals filing joint returns
with taxable income of $5,000 or less, and all other individuals with
taxable income of $2,500 or less, shall have a tax liability of zero.
Sec. 8. K.S.A. 2024 Supp. 79-32,113 is hereby amended to read as
follows: 79-32,113. (a) A person or organization exempt from federal
income taxation under the provisions of the federal internal revenue
code shall also be exempt from the tax imposed by this act in each year
in which such person or organization satisfies the requirements of the
federal internal revenue code for exemption from federal income
taxation. If the exemption applicable to any person or organization
under the provisions of the federal internal revenue code is limited or
qualified in any manner, the exemption from taxes imposed by this
article shall be limited or qualified in a similar manner.
(b) Notwithstanding the provisions of subsection (a), the unrelated
business taxable income, as computed under the provisions of the
federal internal revenue code, of any person or organization otherwise
exempt from the tax imposed by this act and subject to the tax imposed
on unrelated business income by the federal internal revenue code shall
be subject to the tax which would have been imposed by this act but for
the provisions of subsection (a).
(c) In addition to the persons or organizations exempt from federal
income taxation under the provision of the federal internal revenue
code, there shall also be exempt from the tax imposed by this act,
insurance companies, banks, trust companies, savings and loan
associations, credit unions and any other organizations, entities or
persons specifically exempt from Kansas income taxation under the
laws of the state of Kansas.
(d) Notwithstanding the provisions of K.S.A. 79-32,110, and
amendments thereto, the following entities shall be exempt from the tax
imposed by the Kansas income tax act pursuant to K.S.A. 79-32,110,
and amendments thereto:
(1) Any utility that is a cooperative as defined in K.S.A. 66-104d,
and amendments thereto, or owned by one or more such cooperatives;
and
(2) effective for tax years ending on or after January 1, 2021,
every electric and natural gas public utility as defined in K.S.A. 66-104,
and amendments thereto, that is subject to rate regulation by the state
corporation commission.
(e) Every electric and natural gas public utility as defined in
K.S.A. 66-104, and amendments thereto, not including any such utility
that is a cooperative as defined in K.S.A. 66-104d, and amendments
thereto, or owned by one or more such cooperatives shall:
(1) Not be permitted to be included in a consolidated or unitary
combined return; and
(2) except as provided in K.S.A. 2024 Supp. 66-1,239, and
amendments thereto, not collect, as a component of such utility's retail
rates, Kansas income tax expenses; and
(3) exclude sales from the sales factor from sales to the affiliated
utility by members in a unitary business group.
Sec. 9. K.S.A. 2024 Supp. 79-32,121 is hereby amended to read as
follows: 79-32,121. (a) For tax year 2024, and all tax years thereafter, A
taxpayer shall be allowed a Kansas exemption as follows:
(1) In the case of married individuals filing a joint return, a
personal exemption of $18,320;
(2) in the case of all other individuals with a filing status of single,
head of household or married filing separate, a personal exemption of
$9,160; and HOUSE BILL No. 2231—page 14
(3) in addition to the amount allowed pursuant to paragraph (1) or
(2), a personal exemption of $2,320 for each dependent for which such
taxpayer is entitled to a deduction for the taxable year for federal
income tax purposes.
(b) In addition to the exemptions provided in subsection (a),:
(1) Any individual filing a federal income tax return under the
status of head of household, as defined in 26 U.S.C. § 2(b), shall be
allowed an additional Kansas exemption of $2,320 for tax year 2024
and all tax years thereafter; and
(2) any individual who has been honorably discharged from active
service in any branch of the armed forces of the United States and who
is certified by the United States department of veterans affairs or its
successor to be in receipt of disability compensation at the 100% rate, if
the disability is permanent and was sustained through military action or
accident or resulted from disease contracted while in such active
service, such individual shall be allowed an additional Kansas
exemption of $2,250 $2,320 for tax year 2023 2025 and all tax years
thereafter.
Sec. 10. K.S.A. 79-4301 is hereby amended to read as follows: 79-
4301. "The multistate tax compact" is hereby enacted into law and
entered into with all jurisdictions legally joining therein, in the form
substantially as follows:
MULTISTATE TAX COMPACT
ARTICLE I.—Purposes
The purposes of this compact are to:
(1) Facilitate proper determination of state and local tax liability
of multistate taxpayers, including the equitable apportionment of tax
bases and settlement of apportionment disputes.
(2) Promote uniformity or compatibility in significant components
of tax systems.
(3) Facilitate taxpayer convenience and compliance in the filing of
tax returns and in other phases of tax administration.
(4) Avoid duplicative taxation.
ARTICLE II.—Definitions
As used in this compact:
(1) "State" means a state of the United States, the District of
Columbia, the Commonwealth of Puerto Rico, or any territory or
possession of the United States.
(2) "Subdivision" means any governmental unit or special district
of a state.
(3) "Taxpayer" means any corporation, partnership, firm,
association, governmental unit or agency or person acting as a business
entity in more than one state.
(4) "Income tax" means a tax imposed on or measured by net
income including any tax imposed on or measured by an amount
arrived at by deducting expenses from gross income, one or more forms
of which expenses are not specifically and directly related to particular
transactions.
(5) "Capital stock tax" means a tax measured in any way by the
capital of a corporation considered in its entirety.
(6) "Gross receipts tax" means a tax, other than a sales tax, which
is imposed on or measured by the gross volume of business, in terms of
gross receipts or in other terms, and in the determination of which no
deduction is allowed which would constitute the tax an income tax.
(7) "Sales tax" means a tax imposed with respect to the transfer
for a consideration of ownership, possession or custody of tangible
personal property or the rendering of services measured by the price of
the tangible personal property transferred or services rendered and
which is required by state or local law to be separately stated from the
sales price by the seller, or which is customarily separately stated from HOUSE BILL No. 2231—page 15
the sales price, but does not include a tax imposed exclusively on the
sale of a specifically identified commodity or article or class of
commodities or articles.
(8) "Use tax" means a nonrecurring tax, other than a sales tax,
which (a) is imposed on or with respect to the exercise or enjoyment of
any right or power over tangible personal property incident to the
ownership, possession or custody of that property or the leasing of that
property from another including any consumption, keeping, retention,
or other use of tangible personal property and (b) is complimentary to a
sales tax.
(9) "Tax" means an income tax, capital stock tax, gross receipts
tax, sales tax, use tax, and any other tax which has a multistate impact,
except that the provisions of articles III, IV and V of this compact shall
apply only to the taxes specifically designated therein and the
provisions of article IX of this compact shall apply only in respect to
determinations pursuant to article IV.
ARTICLE III.—Elements of Income Tax Laws
(1) Taxpayer option, state and local taxes. Any taxpayer subject to
an income tax whose income is subject to apportionment and allocation
for tax purposes pursuant to the laws of a party state or pursuant to the
laws of subdivisions in two or more party states may elect to apportion
and allocate his income in the manner provided by the laws of such
state or by the laws of such states and subdivisions without reference to
this compact, or may elect to apportion and allocate in accordance with
article IV, except that for tax years commencing on or after January 1,
2027, any taxpayer subject to the tax imposed by K.S.A. 79-32,110(c),
and amendments thereto, shall apportion and allocate in accordance
with article 32 of chapter 79 of the Kansas Statutes Annotated, and
amendments thereto, and shall not apportion or allocate in accordance
with article IV. This election for any tax year may be made in all party
states or subdivisions thereof or in any one or more of the party states
or subdivisions thereof without reference to the election made in the
others. For the purposes of this paragraph, taxes imposed by
subdivisions shall be considered separately from state taxes and the
apportionment and allocation also may be applied to the entire tax base.
In no instance wherein article IV is employed for all subdivisions of a
state may the sum of all apportionments and allocations to subdivisions
within a state be greater than the apportionment and allocation that
would be assignable to that state if the apportionment or allocation
were being made with respect to a state income tax.
(2) Taxpayer option, short form. Each party state or any
subdivision thereof which imposes an income tax shall provide by law
that any taxpayer required to file a return, whose only activities within
the taxing jurisdiction consist of sales and do not include owning or
renting real estate or tangible personal property, and whose dollar
volume of gross sales made during the tax year within the state or
subdivision, as the case may be, is not in excess of $100,000 may elect
to report and pay any tax due on the basis of a percentage of such
volume, and shall adopt rates which shall produce a tax which
reasonably approximates the tax otherwise due. The multistate tax
commission, not more than once in five years, may adjust the $100,000
figure in order to reflect such changes as may occur in the real value of
the dollar, and such adjusted figure, upon adoption by the commission,
shall replace the $100,000 figure specifically provided herein. Each
party state and subdivision thereof may make the same election
available to taxpayers additional to those specified in this paragraph.
(3) Coverage. Nothing in this article relates to the reporting or
payment of any tax other than in income tax.
ARTICLE IV.—Division of Income
(1) As used in this article, unless the context otherwise requires:
(a) "Business income" means income arising from transactions
and activity in the regular course of the taxpayer's trade or business and HOUSE BILL No. 2231—page 16
includes income from tangible and intangible property if the
acquisition, management, and disposition of the property constitute
integral parts of the taxpayer's regular trade or business operations.
(b) "Commercial domicile" means the principal place from which
the trade or business of the taxpayer is directed or managed.
(c) "Compensation" means wages, salaries, commissions and any
other form of remuneration paid to employees for personal services.
(d) "Financial organization" means any bank, trust company,
savings bank, industrial bank, land bank, safe deposit company, private
banker, savings and loan association, credit union, cooperative bank,
small loan company, sales finance company, investment company, or
any type of insurance company.
(e) "Nonbusiness income" means all income other than business
income.
(f) "Public utility" means any business entity (1) which owns or
operates any plant, equipment, property, franchise, or license for the
transmission of communications, transportation of goods or persons,
except by pipeline, or the production, transmission, sale, delivery, or
furnishing of electricity, water or steam; and (2) whose rates of charges
for goods or services have been established or approved by a federal,
state or local government or governmental agency.
(g) "Sales" means all gross receipts of the taxpayer not allocated
under paragraphs of this article.
(h) "State" means any state of the United States, the District of
Columbia, the Commonwealth of Puerto Rico, any territory or
possession of the United States, and any foreign country or political
subdivision thereof.
(i) "This state" means the state in which the relevant tax return is
filed or, in the case of application of this article to the apportionment
and allocation of income for local tax purposes, the subdivision or local
taxing district in which the relevant tax return is filed.
(2) Any taxpayer having income from business activity which is
taxable both within and without this state, other than activity as a
financial organization or public utility or the rendering of purely
personal services by an individual, shall allocate and apportion his net
income as provided in this article. If a taxpayer has income from
business activity as a public utility but derives the greater percentage of
his income from activities subject to this article, the taxpayer may elect
to allocate and apportion his entire net income as provided in this
article.
(3) For purposes of allocation and apportionment of income under
this article, a taxpayer is taxable in another state if (1) in that state he is
subject to a net income tax, a franchise tax measured by net income, a
franchise tax for the privilege of doing business, or a corporate stock
tax, or (2) that state has jurisdiction to subject the taxpayer to a net
income tax regardless of whether, in fact, the state does or does not.
(4) Rents and royalties from real or tangible personal property,
capital gains, interest, dividends or patent or copyright royalties, to the
extent that they constitute nonbusiness income, shall be allocated as
provided in paragraphs 5 through 8 of this article.
(5) (a) Net rents and royalties from real property located in this
state are allocable to this state.
(b) Net rents and royalties from tangible personal property are
allocable to this state: (1) If and to the extent that the property is
utilized in this state, or (2) in their entirety if the taxpayer's commercial
domicile is in this state and the taxpayer is not organized under the laws
of or taxable in the state in which the property is utilized.
(c) The extent of utilization of tangible personal property in a state
is determined by multiplying the rents and royalties by a fraction, the
numerator of which is the number of days of physical location of the
property in the state during the rental or royalty period in the taxable
year and the denominator of which is the number of days of physical
location of the property everywhere during all rental or royalty periods
in the taxable year. If the physical location of the property during the HOUSE BILL No. 2231—page 17
rental or royalty period is unknown or unascertainable by the taxpayer,
tangible personal property is utilized in the state in which the property
was located at the time the rental or royalty payer obtained possession.
(6) (a) Capital gains and losses from sales of real property located
in this state are allocable to this state.
(b) Capital gains and losses from sales of tangible personal
property are allocable to this state if (1) the property had a situs in this
state at the time of the sale, or (2) the taxpayer's commercial domicile is
in this state and the taxpayer is not taxable in the state in which the
property had a situs.
(c) Capital gains and losses from sales of intangible personal
property are allocable to this state if the taxpayer's commercial
domicile is in this state.
(7) Interest and dividends are allocable to this state if the
taxpayer's commercial domicile is in this state.
(8) (a) Patent and copyright royalties are allocable to this state: (1)
If and to the extent that the patent or copyright is utilized by the payer
in this state, or (2) if and to the extent that the patent copyright is
utilized by the payer in a state in which the taxpayer is not taxable and
the taxpayer's commercial domicile is in this state.
(b) A patent is utilized in a state to the extent that it is employed in
production, fabrication, manufacturing, or other processing in the state
or to the extent that a patented product is produced in the state. If the
basis of receipts from patent royalties does not permit allocation to
states or if the accounting procedures do not reflect states of utilization,
the patent is utilized in the state in which the taxpayer's commercial
domicile is located.
(c) A copyright is utilized in a state to the extent that printing or
other publication originates in the state. If the basis of receipts from
copyright royalties does not permit allocation to states or if the
accounting procedures do not reflect states of utilization, the copyright
is utilized in the state in which the taxpayer's commercial domicile is
located.
(9) All business income shall be apportioned to this state by
multiplying the income by a fraction, the numerator of which is the
property factor plus the payroll factor plus the sales factor, and the
denominator of which is three.
(10) The property factor is a fraction, the numerator of which is
the average value of the taxpayer's real and tangible personal property
owned or rented and used in this state during the tax period and the
denominator of which is the average value of all the taxpayer's real and
tangible personal property owned or rented and used during the tax
period.
(11) Property owned by the taxpayer is valued at its original cost.
Property rented by the taxpayer is valued at eight times the net annual
rental rate. Net annual rental rate is the annual rental rate paid by the
taxpayer less any annual rental rate received by the taxpayer from
subrentals.
(12) The average value of property shall be determined by
averaging the values at the beginning and ending of the tax period but
the tax administrator may require the averaging of monthly values
during the tax period if reasonably required to reflect properly the
average value of the taxpayer's property.
(13) The payroll factor is a fraction, the numerator of which is the
total amount paid in this state during the tax period by the taxpayer for
compensation and the denominator of which is the total compensation
paid everywhere during the tax period.
(14) Compensation is paid in this state if:
(a) The individual's service is performed entirely within the state;
(b) The individual's service is performed both within and without
the state, but the service performed without the state is incidental to the
individual's service within the state; or
(c) Some of the service is performed in the state and (1) the base
of operations or, if there is no base of operations, the place from which HOUSE BILL No. 2231—page 18
the service is directed or controlled is in the state, or (2) the base of
operations or the place from which the service is directed or controlled
is not in any state in which some part of the service is performed, but
the individual's residence is in this state.
(15) The sales factor is a fraction, the numerator of which is the
total sales of the taxpayer in this state during the tax period, and the
denominator of which is the total sales of the taxpayer everywhere
during the tax period.
(16) Sales of tangible personal property are in this state if:
(a) The property is delivered or shipped to a purchaser, other than
the United States government, within this state regardless of the f.o.b.
point or other conditions of the sale; or
(b) The property is shipped from an office, store, warehouse,
factory, or other place of storage in this state and (1) the purchaser is
the United States government or (2) the taxpayer is not taxable in the
state of the purchaser.
(17) Sales, other than sales of tangible personal property, are in
this state if:
(a) The income-producing activity is performed in this state; or
(b) The income-producing activity is performed both in and
outside this state and a greater proportion of the income-producing
activity is performed in this state than in any other state, based on costs
of performance.
(18) If the allocation and apportionment provisions of this article
do not fairly represent the extent of the taxpayer's business activity in
this state, the taxpayer may petition for or the tax administrator may
require, in respect to all or any part of the taxpayer's business activity,
if reasonable:
(a) Separate accounting;
(b) The exclusion of any one or more of the factors;
(c) The inclusion of one or more additional factors which will
fairly represent the taxpayer's business activity in this state; or
(d) The employment of any other method to effectuate an
equitable allocation and apportionment of the taxpayer's income.
ARTICLE V.—Elements of Sales and Use Tax Laws
(1) Tax credit. Each purchaser liable for a use tax on tangible
personal property shall be entitled to full credit for the combined
amount or amounts of legally imposed sales or use taxes paid by him
with respect to the same property to another state and any subdivision
thereof. The credit shall be applied first against the amount of any use
tax due the state, and any unused portion of the credit shall then be
applied against the amount of any use tax due a subdivision.
(2) Exemption certificates, vendors may rely. Whenever a vendor
receives and accepts in good faith from a purchaser a resale or other
exemption certificate or other written evidence of exemption authorized
by the appropriate state or subdivision taxing authority, the vendor shall
be relieved of liability for a sales or use tax with respect to the
transaction.
ARTICLE VI.—The Commission
(1) Organization and management. (a) The multistate tax
commission is hereby established. It shall be composed of one
"member" from each party state who shall be the head of the state
agency charged with the administration of the types of taxes to which
this compact applies. If there is more than one such agency the state
shall provide by law for the selection of the commission member from
the heads of the relevant agencies. State law may provide that a
member of the commission be represented by an alternate but only if
there is on file with the commission written notification of the
designation and identity of the alternate. The attorney general of each
party state or his designee, or other counsel if the laws of the party state
specifically provide, shall be entitled to attend the meetings of the
commission, but shall not vote. Such attorneys general, designees, or HOUSE BILL No. 2231—page 19
other counsel shall receive all notices of meetings required under
paragraph (1) (e) of this article.
(b) Each party state shall provide by law for the selection of
representatives from its subdivisions affected by this compact to
consult with the commission member from that state.
(c) Each member shall be entitled to one vote. The commission
shall not act unless a majority of the members are present, and no
action shall be binding unless approved by a majority of the total
number of members.
(d) The commission shall adopt an official seal to be used as it
may provide.
(e) The commission shall hold an annual meeting and such other
regular meetings as its bylaws may provide and such special meetings
as its executive committee may determine. The commission bylaws
shall specify the dates of the annual and any other regular meetings,
and shall provide for the giving of notice of annual, regular and special
meetings. Notices of special meetings shall include the reasons therefor
and an agenda of the items to be considered.
(f) The commission shall elect annually, from among its members,
a chairman, a vice-chairman and a treasurer. The commission shall
appoint an executive director who shall serve at its pleasure, and it shall
fix his duties and compensation. The executive director shall be
secretary of the commission. The commission shall make provision for
the bonding of such of its officers and employees as it may deem
appropriate.
(g) Irrespective of the civil service, personnel or other merit
system laws of any party state, the executive director shall appoint or
discharge such personnel as may be necessary for the performance of
the functions of the commission and shall fix their duties and
compensation. The commission bylaws shall provide for personnel
policies and programs.
(h) The commission may borrow, accept or contract for the
services of personnel from any state, the United States, or any other
governmental entity.
(i) The commission may accept for any of its purposes and
functions any and all donations and grants of money, equipment,
supplies, materials and services, conditional or otherwise, from any
governmental entity, and may utilize and dispose of the same.
(j) The commission may establish one or more offices for the
transacting of its business.
(k) The commission shall adopt bylaws for the conduct of its
business. The commission shall publish its bylaws in convenient form,
and shall file a copy of the bylaws and any amendments thereto with
the appropriate agency or officer in each of the party states.
(l) The commission annually shall make to the governor and
legislature of each party state a report covering its activities for the
preceding year. Any donation or grant accepted by the commission or
services borrowed shall be reported in the annual report of the
commission, and shall include the nature, amount and conditions, if
any, of the donation, gift, grant or services borrowed and the identity of
the donor or lender. The commission may make additional reports as it
may deem desirable.
(2) Committees. (a) To assist in the conduct of its business when
the full commission is not meeting, the commission shall have an
executive committee of seven members, including the chairman, vice-
chairman, treasurer and four other members elected annually by the
commission. The executive committee, subject to the provisions of this
compact and consistent with the policies of the commission, shall
function as provided in the laws of the commission.
(b) The commission may establish advisory and technical
committees, membership on which may include private persons and
public officials, in furthering any of its activities. Such committees may
consider any matter of concern to the commission, including problems
of special interest to any party state and problems dealing with HOUSE BILL No. 2231—page 20
particular types of taxes.
(c) The commission may establish such additional committees as
its bylaws may provide.
(3) Powers. In addition to powers conferred elsewhere in this
compact, the commission shall have power to:
(a) Study state and local tax systems and particular types of state
and local taxes.
(b) Develop and recommend proposals for an increase in
uniformity or compatibility of state and local tax laws with a view
toward encouraging the simplification and improvement of state and
local tax law and administration.
(c) Compile and publish information as in its judgment would
assist the party states in implementation of the compact and taxpayers
in complying with state and local tax laws.
(d) Do all things necessary and incidental to the administration of
its functions pursuant to this compact.
(4) Finance. (a) The commission shall submit to the governor or
designated officer or officers of each party state a budget of its
estimated expenditures for such period as may be required by the laws
of that state for presentation to the legislature thereof.
(b) Each of the commission's budget of estimated expenditures
shall contain specific recommendations of the amounts to be
appropriated by each of the party states. The total amount of
appropriations requested under any such budget shall be apportioned
among the party states as follows: One-tenth in equal shares; and the
remainder in proportion of the amount of revenue collected by each
party state and its subdivisions from income taxes, capital stock taxes,
gross receipts taxes, sales and use taxes. In determining such amounts,
the commission shall employ such available public sources of
information as, in its judgment, present the most equitable and accurate
comparisons among the party states. Each of the commission's budgets
of estimated expenditures and requests for appropriations shall indicate
the sources used in obtaining information employed in applying the
formula contained in this paragraph.
(c) The commission shall not pledge the credit of any party state.
The commission may meet any of its obligations in whole or in part
with funds available to it under paragraph (1) (i) of this article:
Provided, That the commission takes specific action setting aside such
funds prior to incurring any obligation to be met in whole or in part in
such manner. Except where the commission makes use of funds
available to it under paragraph (1) (i), the commission shall not incur
any obligation prior to the allotment of funds by the party states
adequate to meet the same.
(d) The commission shall keep accurate accounts of all receipts
and disbursements. The receipts and disbursements of the commission
shall be subject to the audit and accounting procedures established
under its bylaws. All receipts and disbursements of funds handled by
the commission shall be audited yearly by a certified or licensed public
accountant and the report of the audit shall be included in and become
part of the annual report of the commission.
(e) The accounts of the commission shall be open at any
reasonable time for inspection by duly constituted officers of the party
states and by any persons authorized by the commission.
(f) Nothing contained in this article shall be construed to prevent
commission compliance with laws relating to audit or inspection of
accounts by or on behalf of any government contributing to the support
of the commission.
ARTICLE VII.—Uniform Regulations and Forms
(1) Whenever any two or more party states, or subdivisions of
party states, have uniform or similar provisions of law relating to an
income tax, capital stock tax, gross receipts tax, sales or use tax, the
commission may adopt uniform regulations for any phase of the
administration of such law, including assertion of jurisdiction to tax, or HOUSE BILL No. 2231—page 21
prescribing uniform tax forms. The commission may also act with
respect to the provisions of article IV of this compact.
(2) Prior to the adoption of any regulation, the commission shall:
(a) As provided in its bylaws, hold at least one public hearing on
due notice to all affected party states and subdivisions thereof and to all
taxpayers and other persons who have made timely request of the
commission for advance notice of its regulation-making proceedings.
(b) Afford all affected party states and subdivisions and interested
persons an opportunity to submit relevant written data and views,
which shall be considered fully by the commission.
(3) The commission shall submit any regulations adopted by it to
the appropriate officials of all party states and subdivisions to which
they might apply. Each such state and subdivision shall consider any
such regulation for adoption in accordance with its own laws and
procedures.
ARTICLE VIII.—Interstate Audits
(1) This article shall be in force only in those party states that
specifically provide therefor by statute.
(2) Any party state or subdivision thereof desiring to make or
participate in an audit of any accounts, books, papers, records or other
documents may request the commission to perform the audit on its
behalf. In responding to the request, the commission shall have access
to and may examine, at any reasonable time, such accounts, books,
papers, records, and other documents and any relevant property or
stock of merchandise. The commission may enter into agreements with
party states or their subdivisions for assistance in performance of the
audit. The commission shall make charges, to be paid by the state or
local government or governments for which it performs the service, for
any audits performed by it in order to reimburse itself for the actual
costs incurred in making the audit.
(3) The commission may require the attendance of any person
within the state where it is conducting an audit or part thereof at a time
and place fixed by it within such state for the purpose of giving
testimony with respect to any account, book, paper, document, other
record, property or stock of merchandise being examined in connection
with the audit. If the person is not within the jurisdiction, he may be
required to attend for such purpose at any time and place fixed by the
commission within the state of which he is a resident: Provided, That
such state has adopted this article.
(4) The commission may apply to any court having power to issue
compulsory process for orders in aid of its powers and responsibilities
pursuant to this article and any and all such courts shall have
jurisdiction to issue such orders. Failure of any person to obey any such
order shall be punishable as contempt of the issuing court. If the party
or subject matter on account of which the commission seeks an order is
within the jurisdiction of the court to which application is made, such
application may be to a court in the state or subdivision on behalf of
which the audit is being made or a court in the state in which the object
of the order being sought is situated. The provisions of this paragraph
apply only to courts in a state that has adopted this article.
(5) The commission may decline to perform any audit requested if
it finds that its available personnel or other resources are insufficient
for the purpose or that, in the terms requested, the audit is impracticable
of satisfactory performance. If the commission, on the basis of its
experience, has reason to believe that an audit of a particular taxpayer,
either at a particular time or on a particular schedule, would be of
interest to a number of party states or their subdivisions, it may offer to
make the audit or audits, the offer to be contingent on sufficient
participation therein as determined by the commission.
(6) Information obtained by any audit pursuant to this article shall
be confidential and available only for tax purposes to party states, their
subdivisions or the United States. Availability of information shall be in
accordance with the laws of the states or subdivisions on whose HOUSE BILL No. 2231—page 22
account the commission performs the audit, and only through the
appropriate agencies or officers of such states or subdivisions. Nothing
in this article shall be construed to require any taxpayer to keep records
for any period not otherwise required by law.
(7) Other arrangements made or authorized pursuant to law for
cooperative audit by or on behalf of the party states or any of their
subdivisions are not superseded or invalidated by this article.
(8) In no event shall the commission make any charge against a
taxpayer for an audit.
(9) As used in this article, "tax," in addition to the meaning
ascribed to it in article II, means any tax or license fee imposed in
whole or in part for revenue purposes.
ARTICLE IX.—Arbitration
(1) Whenever the commission finds a need for settling disputes
concerning apportionments and allocations by arbitration, it may adopt
a regulation placing this article in effect, notwithstanding the provisions
of article VII.
(2) The commission shall select and maintain an arbitration panel
composed of officers and employees of state and local governments
and private persons who shall be knowledgeable and experienced in
matters of tax law and administration.
(3) Whenever a taxpayer who has elected to employ article IV, or
whenever the laws of the party state or subdivision thereof are
substantially identical with the relevant provisions of article IV, the
taxpayer, by written notice to the commission and to each party state or
subdivision thereof that would be affected, may secure arbitration of an
apportionment or allocation, if he is dissatisfied with the final
administrative determination of the tax agency of the state or
subdivision with respect thereto on the ground that it would subject him
to double or multiple taxation by two or more party states or
subdivisions thereof. Each party state and subdivision thereof hereby
consents to the arbitration as provided herein, and agrees to be bound
thereby.
(4) The arbitration board shall be composed of one person selected
by the taxpayer, one by the agency or agencies involved, and one
member of the commission's arbitration panel. If the agencies involved
are unable to agree on the person to be selected by them, such person
shall be selected by lot from the total membership of the arbitration
panel. The two persons selected for the board in the manner provided
by the foregoing provisions of this paragraph shall jointly select the
third member of the board. If they are unable to agree on the selection,
the third member shall be selected by lot from among the total
membership of the arbitration panel. No member of a board selected by
lot shall be qualified to serve if he is an officer or employee or is
otherwise affiliated with any party to the arbitration proceeding.
Residence within the jurisdiction of a party to the arbitration
proceeding shall not constitute affiliation within the meaning of this
paragraph.
(5) The board may sit in any state or subdivision party to the
proceeding, in the state of the taxpayer's incorporation, residence or
domicile, in any state where the taxpayer does business, or in any place
that it finds most appropriate for gaining access to evidence relevant to
the matter before it.
(6) The board shall give due notice of the times and places of its
hearings. The parties shall be entitled to be heard, to present evidence,
and to examine and cross-examine witnesses. The board shall act by
majority vote.
(7) The board shall have power to administer oaths, take
testimony, subpoena and require the attendance of witnesses and the
production of accounts, books, papers, records, and other documents,
and issue commissions to take testimony. Subpoenas may be signed by
any member of the board. In case of failure to obey a subpoena, and
upon application by the board, any judge of a court of competent HOUSE BILL No. 2231—page 23
jurisdiction of the state in which the board is sitting or in which the
person to whom the subpoena is directed may be found may make an
order requiring compliance with the subpoena, and the court may
punish failure to obey the order as a contempt. The provisions of this
paragraph apply only in states that have adopted this article.
(8) Unless the parties otherwise agree the expenses and other costs
of the arbitration shall be assessed and allocated among the parties by
the board in such manner as it may determine. The commission shall
fix a schedule of compensation for members of arbitration boards and
of other allowable expenses and costs. No officer or employee of a state
or local government who serves as a member of a board shall be
entitled to compensation therefor unless he is required on account of his
service to forego the regular compensation attaching to his public
employment, but any such board member shall be entitled to expenses.
(9) The board shall determine the disputed apportionment or
allocation and any matters necessary thereto. The determinations of the
board shall be final for purposes of making the apportionment or
allocation, but for no other purpose.
(10) The board shall file with the commission and with each tax
agency represented in the proceeding: The determination of the board;
the board's written statement of its reasons therefor; the record of the
board's proceedings; and any other documents required by the
arbitration rules of the commission to be filed.
(11) The commission shall publish the determinations of boards
together with the statements of the reasons therefor.
(12) The commission shall adopt and publish rules of procedure
and practice and shall file a copy of such rules and of any amendment
thereto with the appropriate agency or officer in each of the party
states.
(13) Nothing contained herein shall prevent at any time a written
compromise of any matter or matters in dispute, if otherwise lawful, by
the parties to the arbitration proceeding.
ARTICLE X.—Entry Into Force and Withdrawal
(1) This compact shall enter into force when enacted into law by
any seven states. Thereafter, this compact shall become effective as to
any other state upon its enactment thereof. The commission shall
arrange for notification of all party states whenever there is a new
enactment of the compact.
(2) Any party state may withdraw from this compact by enacting a
statute repealing the same. No withdrawal shall affect any liability
already incurred by or chargeable to a party state prior to the time of
such withdrawal.
(3) No proceeding commenced before an arbitration board prior to
the withdrawal of a state and to which the withdrawing state or any
subdivision thereof is a party shall be discontinued or terminated by the
withdrawal, nor shall the board thereby lose jurisdiction over any of the
parties to the proceeding necessary to make a binding determination
therein.
ARTICLE XI.—Effect on Other Laws and Jurisdiction
Nothing in this compact shall be construed to:
(a) Affect the power of any state or subdivision thereof to fix rates
of taxation, except that a party state shall be obligated to implement
article III (2) of this compact.
(b) Apply to any tax or fixed fee imposed for the registration of a
motor vehicle or any tax on motor fuel, other than a sales tax:
Provided, That the definition of "tax" in article VIII (9) may apply for
the purposes of that article and the commission's powers of study and
recommendation pursuant to article VI (3) may apply.
(c) Withdraw or limit the jurisdiction of any state or local court or
administrative officer or body with respect to any person, corporation
or other entity or subject matter, except to the extent that such
jurisdiction is expressly conferred by or pursuant to this compact upon HOUSE BILL No. 2231—page 24
another agency or body.
(d) Supersede or limit the jurisdiction of any court of the United
States.
ARTICLE XII.—Construction and Severability
This compact shall be liberally construed so as to effectuate the
purposes thereof. The provisions of this compact shall be severable and
if any phrase, clause, sentence or provision of this compact is declared
to be contrary to the constitution of any state or of the United States or
the applicability thereof to any government, agency, person or
circumstance is held invalid, the validity of the remainder of this
compact and the applicability thereof to any government, agency,
person or circumstance shall not be affected thereby. If this compact
shall be held contrary to the constitution of any state participating
therein, the compact shall remain in full force and effect as to the
remaining party states and in full force and effect as to the state
affected as to all severable matters.
Sec. 11. K.S.A. 2024 Supp. 79-4508a is hereby amended to read
as follows: 79-4508a. (a) For tax year 2022, and all tax years thereafter,
the amount of any claim pursuant to this section shall be computed by
deducting the claimant's base year ad valorem tax amount for the
homestead from the claimant's homestead ad valorem tax amount for
the tax year for which the refund is sought.
(b) As used in this section:
(1) "Base year" means the year in which an individual becomes an
eligible claimant and who is also eligible for a claim for refund
pursuant to this section. For any individual who would otherwise be an
eligible claimant prior to 2021, such base year shall be deemed to be
2021 for the purposes of this act.
(2) "Claimant" means a person who has filed a claim under the
provisions of this act and was, during the entire calendar year preceding
the year in which such claim was filed for refund under this act, except
as provided in K.S.A. 79-4503, and amendments thereto, both
domiciled in this state and was: (A) A person who is 65 years of age or
older; or (B) a disabled veteran. The surviving spouse of a person 65
years of age or older or a disabled veteran who was receiving benefits
pursuant to this section at the time of the claimant's death shall be
eligible to continue to receive benefits until such time the surviving
spouse remarries.
(3) For tax year 2025 and all tax years thereafter, "household
income" means the total Kansas adjusted gross income of all persons
of a household in a calendar year while members of such household.
(c) A claimant shall only be eligible for a claim for refund under
this section if:
(1) The claimant's household income for the year in which the
claim is filed is $50,000 or less; and
(2) the appraised value of the claimant's homestead for the base
year is $350,000 or less.
The provisions of K.S.A. 79-4522, and amendments thereto, shall
not apply to a claim pursuant to this section. In the case of all tax years
commencing after December 31, 2022, the upper limit household
income threshold amount prescribed in this subsection shall be
increased by an amount equal to such threshold amount multiplied by
the cost-of-living adjustment determined under section 1(f)(3) of the
federal internal revenue code for the calendar year in which the taxable
year commences.
(d) A taxpayer shall not be eligible for a homestead property tax
refund claim pursuant to this section if such taxpayer has received for
such property for such tax year either: (1) A homestead property tax
refund pursuant to K.S.A. 79-4508, and amendments thereto; or (2) the
selective assistance for effective senior relief (SAFESR) credit pursuant
to K.S.A. 79-32,263, and amendments thereto.
(e) The amount of any claim shall be computed to the nearest $1.
(f) The provisions of this section shall be a part of and HOUSE BILL No. 2231—page 25
supplemental to the homestead property tax refund act.
Sec. 12. K.S.A. 79-5501 is hereby amended to read as follows: 79-
5501. (a) On and after Commencing on July 1, 2013, and through
December 31, 2025, watercraft shall be appraised at fair market value
determined therefor pursuant to K.S.A. 79-503a, and amendments
thereto, and assessed at the percentage of value as follows: (1) 11.5% in
tax year 2014; and (2) 5% in tax year years 2015 and all tax years
thereafter through 2025. On and after January 1, 2014, the levy used to
calculate the tax on watercraft shall be the county average tax rate. In
no case shall the assessed value of any watercraft, as determined under
the provisions of this section, cause the tax upon such watercraft to be
less than $12.
(b) As used in this section, the term "watercraft" means any
watercraft designed to be propelled by machinery, oars, paddles or
wind action upon a sail for navigation on the water which, if not for the
provisions of this section, would be properly classified under subclass 5
or 6 of class 2 of section 1 of article 11 of the Kansas constitution. This
section shall not be construed as taxing any watercraft which otherwise
would be exempt from property taxation under the laws of the state of
Kansas. Each watercraft may include one trailer which is designed to
launch, retrieve, transport and store such watercraft and any nonelectric
motor or motors which are necessary to operate such watercraft on the
water.
(c) Any watercraft which is designed to be propelled through the
water through human power alone shall be exempt from all property or
ad valorem taxes levied under the laws of the state of Kansas.
(d) The "county average tax rate" means the total amount of
general property taxes levied within the county by the state, county and
all other taxing subdivisions divided by the total assessed valuation of
all taxable property within the county as of November 1 of the year
prior to the year of valuation as certified by the secretary of revenue.
(e) On and after January 1, 2026, all watercraft shall be exempt
from all property or ad valorem taxes levied under the laws of the state
of Kansas. HOUSE BILL No. 2231—page 26
Sec. 13. K.S.A. 79-213, 79-1129, 79-3279, 79-3287, 79-4301 and
79-5501 and K.S.A. 2024 Supp. 79-32,110, 79-32,113, 79-32,121 and
79-4508a are hereby repealed.
Sec. 14. This act shall take effect and be in force from and after its
publication in the statute book.
I hereby certify that the above BILL originated in the HOUSE, and was
adopted by that body
HOUSE adopted
Conference Committee Report
Speaker of the House.
Chief Clerk of the House.
Passed the SENATE
as amended
SENATE adopted
Conference Committee Report
President of the Senate.
Secretary of the Senate.
APPROVED
Governor.