As Amended by Senate Committee
Session of 2025
SENATE BILL No. 259
By Committee on Assessment and Taxation
2-11
AN ACT concerning taxation; relating to income tax and privilege taxes;
providing that future tax rate decreases be contingent on exceeding
revenue estimates; amending K.S.A. 2024 Supp. 79-1107, 79-1108 and
79-32,110 and repealing the existing section sections.
Be it enacted by the Legislature of the State of Kansas:
New Section 1. (a) As used in this section:
(1) "Adjusted consumer price ratio" means the fiscal year consumer
price index divided by the base year consumer price index.
(2) "Adjusted general revenue fund collections" means actual tax
receipt revenues to the state general fund.
(3) "Base year revenues" means actual tax receipt revenues to the
state general fund for fiscal year 2024 in the amount of $10,003,833,599.
(4) "Base year consumer price index" means a 12-month average of
the not seasonally adjusted consumer price index for all urban consumers
for fiscal year 2024.
(5) "Excess fiscal year general revenue fund collections" means the
positive difference from subtracting the inflation adjusted base year
revenues from the adjusted general revenue fund collections from the
immediately preceding fiscal year.
(6) "Fiscal year consumer price index" means a 12-month average of
the not seasonally adjusted consumer price index for all urban consumers
for the immediately preceding fiscal year.
(7) "Inflation adjusted base year revenues" means the base year
revenues multiplied by the adjusted consumer price ratio.
(b) Commencing on August 15, 2025, and every August 15 thereafter,
the director of the budget, in consultation with the director of legislative
research, shall determine whether the total fiscal year adjusted general
revenue fund collections from the immediately preceding fiscal year are in
excess of the inflation adjusted base year revenues. If the total fiscal year
adjusted general revenue fund collections from the immediately preceding
fiscal year are in excess of the inflation adjusted base year revenues, the
director of the budget shall certify to the secretary of revenue the existence
of such excess and the amount of the excess.
(c) In the event that the secretary of revenue certifies that the adjusted
general revenue fund collections from the immediately preceding fiscal
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year are in excess of the inflation adjusted base year revenues, the
secretary shall calculate and publish the income tax rate reduction and
privilege tax rate reductions as a result of the excess. In calculating the
income tax rate reduction reductions, the excess fiscal year general
revenue fund collections shall be computed that would result in the
reduction of the income tax rates pursuant to subsection (d) in an amount
approximately equal to the rate reductions down to the nearest 0.01% to go
into effect for the next tax year. In calculating the privilege tax rate
reductions pursuant to subsection (d), the reduction shall be a
corresponding rate reduction that is equal to the total percentage
adjustment to the corporate income tax. Such rate reductions shall remain
in effect unless further reduced pursuant to this section. The income tax
brackets and taxable income thresholds prescribed in K.S.A. 79-32,110(a),
and amendments thereto, shall be adjusted to reflect the changes in income
tax rates.
(d) The secretary shall first compute the reduction of the income tax
rates pursuant to K.S.A. 79-32,110(a), and amendments thereto, that
decreases proportionally all tax rates in effect. Once the lower income tax
rate is decreased to 4.5%, there shall be no further reductions to the lower
income tax rate and further reductions shall only be applied to reduce the
higher income tax rate in effect. Upon the higher income tax rate being
decreased to 4.5%, no further reductions shall occur to K.S.A. 79-
32,110(a), and amendments thereto. The secretary shall then compute
decreases to:
(1) The surtax imposed pursuant to K.S.A. 79-32,110(c), and
amendments thereto. The surtax shall be decreased until the combined
normal and surtax rates equal 4.5% that are imposed pursuant to K.S.A.
79-32,110(c), and amendments thereto. Once the combined normal and
surtax rates pursuant to K.S.A. 79-32,110(a) 79-32,110(c), and
amendments thereto, equal 4.5%, no further reductions shall occur;
(2) the normal tax imposed pursuant to K.S.A. 79-1107, and
amendments thereto. The normal tax shall be decreased until the
combined normal and surtax rates equal 2.82% that are imposed
pursuant to K.S.A. 79-1107, and amendments thereto. Once the
combined normal and surtax rates pursuant to K.S.A. 79-1107, and
amendments thereto, equal 2.82%, no further reductions shall occur;
and
(3) the normal tax imposed pursuant to K.S.A. 79-1108, and
amendments thereto. The normal tax shall be decreased until the
combined normal and surtax rates equal 2.9% that are imposed
pursuant to K.S.A. 79-1108, and amendments thereto. Once the
combined normal and surtax rates pursuant to K.S.A. 79-1108, and
amendments thereto, equal 2.9%, no further reductions shall occur.
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Sec. 2. K.S.A. 2024 Supp. 79-1107 is hereby amended to read as
follows: 79-1107. (a) Every national banking association and state bank
located or doing business within the state shall pay to the state for the
privilege of doing business within the state a tax according to or
measured by its net income for the next preceding taxable year to be
computed as provided in this act. Such tax shall consist of a normal tax
and a surtax and shall be computed as follows unless otherwise modified
pursuant to section 1, and amendments thereto:
(1) For tax year 2024, and all tax years thereafter, the normal tax
shall be an amount equal to 1.94% of such net income; and
(2) the surtax shall be an amount equal to 2.125% of such net
income in excess of $25,000.
(b) The tax levied shall be in lieu of ad valorem taxes which might
otherwise be imposed by the state or political subdivisions thereof upon
shares of capital stock or the intangible assets of national banking
associations and state banks.
Sec. 3. K.S.A. 2024 Supp. 79-1108 is hereby amended to read as
follows: 79-1108. (a) Every trust company and savings and loan
association located or doing business within the state shall pay to the
state for the privilege of doing business within the state a tax according
to or measured by its net income for the next preceding taxable year to
be computed as provided in this act. Such tax shall consist of a normal
tax and a surtax and shall be computed as follows unless otherwise
modified pursuant to section 1, and amendments thereto:
(1) For tax year 2024, and all tax years thereafter, the normal tax
on every trust company and savings and loan association shall be an
amount equal to 1.93% of such net income; and
(2) the surtax on every trust company and savings and loan
association shall be an amount equal to 2.25% of such net income in
excess of $25,000.
(b) The tax levied shall be in lieu of ad valorem taxes which might
otherwise be imposed by the state or political subdivision thereof upon
shares of capital stock or other intangible assets of trust companies and
savings and loan associations.
Sec. 2. 4. 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 unless
otherwise modified pursuant to section 1, and amendments thereto:
(1) Married individuals filing joint returns.
(A) For tax years 2018 through 2023:
If the taxable income is: The tax is:
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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 or section 1, and
amendments thereto:
(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
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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. 3. 5. K.S.A. 2024 Supp. 79-1107, 79-1108 and 79-32,110 is are
hereby repealed.
Sec. 4. 6. This act shall take effect and be in force from and after its
publication in the statute book.
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