Kansas 2025-2026 Regular Session

Kansas Senate Bill SB277

Introduced
2/19/25  

Caption

Exempting certain qualified tips from state income tax.

Impact

Should SB277 be enacted, it would significantly impact the income tax liabilities of many workers in the service industry, particularly those in occupations where tipping is customary. This includes positions in restaurants, bars, and hospitality services. By exempting these tips, the proposed law is intended to alleviate the tax burden on these employees, recognizing the considerable proportion of their income that tips can represent. The bill reflects a growing recognition of the unique financial situations faced by service workers, who often depend on tipping for a significant portion of their earnings.

Summary

SB277, introduced in the Kansas Legislature, proposes specific modifications to the state income tax code regarding the treatment of certain qualified tips received by individuals. The bill aims to exempt these qualified tips from Kansas state income tax by establishing a subtraction modification in the calculation of Kansas adjusted gross income. This adjustment applies to qualified cash tips received during the taxable year that are reported to employers, thereby ensuring that these individuals are not taxed on income that they earn from tips.

Contention

Despite the potential benefits of SB277 to service workers, some points of contention may arise. Critics may argue that such a tax exemption could reduce state revenues, which could impact funding for public services. Additionally, there may be concerns regarding the implementation of the bill, particularly in regards to how 'qualified tips' are defined and verified. Stakeholders may also debate the fairness of the policy, questioning whether the same treatment should be extended to all forms of income or if this particular exemption undermines a more equitable tax structure.

Companion Bills

No companion bills found.

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