Session of 2025
SENATE BILL No. 283
By Committee on Assessment and Taxation
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AN ACT concerning taxation; relating to income tax; decreasing income
tax rates for individuals; discontinuing income, premium and privilege
tax credits of the high performance incentive program and the Kansas
affordable housing tax credit act; repealing tax credits relating to
abandoned well plugging, agritourism liability insurance, assistive
technology contributions, declared disaster capital investment,
environmental compliance, owners promoting employment across
Kansas and swine facility improvement; relating to withholding tax;
discontinuing benefits of the promoting employment across Kansas act;
discontinuing the crediting of certain amounts to the job creation
program fund; amending K.S.A. 65-7107, 74-50,132, 74-50,212 and
74-50,213 and K.S.A. 2024 Supp. 74-50,107, 79-32,110, 79-32,160a
and 79-32,306 and repealing the existing sections; also repealing
K.S.A. 79-32,204, 79-32,207, 79-32,222, 79-32,262 and 79-32,266 and
K.S.A. 2024 Supp. 32-1438.
Be it enacted by the Legislature of the State of Kansas:
Section 1. On and after January 1, 2026, K.S.A. 65-7107 is hereby
amended to read as follows: 65-7107. (a) Appropriate state agencies are
hereby directed to amend their state plans to protect the benefits of those
receiving such benefits by adding language consistent with the following:
Any funds in an individual development account, including accrued
interest, shall be disregarded when determining eligibility to receive the
amount of any public assistance or benefits.
(b) A program contributor shall be allowed a credit against state
income tax imposed under the Kansas income tax act in an amount equal
to 25% of the contribution amount.
(c) The institute shall verify all tax credit claims by contributors. The
administration of the community-based organization, with the cooperation
of the participating financial institutions, shall submit the names of
contributors and the total amount each contributor contributes to the
individual development account reserve fund for the calendar year. The
institute shall determine the date by which such information shall be
submitted to the institute by the local administrator. The institute shall
submit verification of qualified tax credits pursuant to K.S.A. 65-7101
through 65-7107, and amendments thereto, to the department of revenue.
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(d) The total tax credits authorized pursuant to this section shall not
exceed $6,250 in any fiscal year.
(e) The provisions of this section shall be applicable to all taxable
years commencing after December 31, 2002.
(f) For tax year 2013 and all tax years thereafter, the income tax
credit provided by this section shall only be available to taxpayers subject
to the income tax on corporations imposed pursuant to subsection (c) of
K.S.A. 79-32,110, and amendments thereto, and shall be applied only
against such taxpayer's corporate income tax liability.
Sec. 2. K.S.A. 2024 Supp. 74-50,107 is hereby amended to read as
follows: 74-50,107. (a) Except as provided further, commencing on July 1,
2021, and on the first day of each month thereafter during fiscal year 2024,
fiscal year 2025 and fiscal year 2026, the secretary of revenue shall apply
a rate of 2% to that portion of moneys withheld from the wages of
individuals and collected under the Kansas withholding and declaration of
estimated tax act, K.S.A. 79-3294 et seq., and amendments thereto. The
amount so determined shall be credited on a monthly basis as follows: (1)
An amount necessary to meet obligations of the debt services for the
IMPACT program repayment fund; (2) an amount to the IMPACT program
services fund as needed for program administration; and (3) any remaining
amounts to the job creation program fund created pursuant to K.S.A. 74-
50,224, and amendments thereto, except that no amounts shall be credited
to the job creation program fund during fiscal year 2026. During fiscal
year 2024, fiscal year 2025 and fiscal year 2026, the aggregate amount that
is credited to the job creation program fund pursuant to this subsection
shall not exceed $20,000,000 for each such fiscal year.
(b) Commencing on July 1, 2026, and on an annual basis thereafter,
the secretary of revenue shall estimate the amount equal to the amount of
net savings realized from the elimination, modification or limitation of any
credit, deduction or program pursuant to the provisions of this act as
compared to the expense deduction provided for in K.S.A. 79-32,143a, and
amendments thereto. Whereupon such amount of savings in accordance
with appropriation acts shall be remitted to the state treasurer in
accordance with the provisions of K.S.A. 75-4215, and amendments
thereto. Upon receipt of each such remittance, the state treasurer shall
deposit the entire amount to the credit of the job creation program fund
created pursuant to K.S.A. 74-50,224, and amendments thereto. In
addition, such other amount or amounts of money may be transferred from
the state general fund or any other fund or funds in the state treasury to the
job creation program fund in accordance with appropriation acts.
Sec. 3. K.S.A. 74-50,132 is hereby amended to read as follows: 74-
50,132. (a) For taxable years commencing after December 31, 1997, and
before January 1, 2026, a qualified firm shall be entitled to a credit against
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the tax imposed by the Kansas income tax act, the premium tax or
privilege fee imposed pursuant to K.S.A. 40-252, and amendments thereto
or the privilege tax as measured by net income of financial institutions
imposed pursuant to chapter 79, article 11 of the Kansas Statutes
Annotated in an amount equal to the portion of the qualified business
facility cash investment in the training and education of the firm's
employees that exceeds 2% of the firm's total payroll costs. The maximum
amount of the credit that may be claimed by a single corporate taxpayer in
any single tax year under this section shall not exceed $50,000. Tax credits
earned by a qualified business under this section must be claimed in their
entirety in the tax year eligible.
(b) For tax years commencing after December 31, 2005, and before
January 1, 2026, any taxpayer claiming credits pursuant to this section, as
a condition for claiming and qualifying for such credits, shall provide
information pursuant to K.S.A. 79-32,243, and amendments thereto, as
part of the tax return in which such credits are claimed. Such credits shall
not be denied solely on the basis of the contents of the information
provided by the taxpayer pursuant to K.S.A. 79-32,243, and amendments
thereto.
Sec. 4. K.S.A. 74-50,212 is hereby amended to read as follows: 74-
50,212. (a) In order to qualify for benefits under this act a qualified
company shall:
(1) Relocate to Kansas an existing business facility, office,
department or other operation doing business outside the state of Kansas
and locate the jobs directly related to such relocated business facility,
office, department or other operation in Kansas;
(2) locate a new business facility, office, department or other
operation in Kansas and locate the jobs directly related to such business
facility, office, department or other operation in Kansas; or
(3) expand an existing business facility, office, department or other
operation located in the state of Kansas and locate the jobs directly related
to such business facility, office, department or other operation in Kansas,
except that no payroll withholding taxes shall be retained prior to January
1, 2012.
A qualified company may utilize or contract with a third-party
employer to perform services whereby the third-party employer serves as
the legal employer of the new employees providing services to the
qualified company and such services are performed in Kansas and the
third-party employer and the new employees are subject to the Kansas
withholding and declaration of estimated tax act.
The secretary shall not approve any application for benefits under this
subsection on and after July 1, 2025.
(b) Any qualified company, approved by the secretary for benefits
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pursuant to paragraph subsection (a), that locates its business operation in
a metropolitan county and will hire at least 10 new employees within two
years from the date the qualified company enters into an agreement with
the secretary pursuant to K.S.A. 74-50,213, and amendments thereto, or
any qualified company, approved by the secretary for benefits pursuant to
paragraph subsection (a), that locates its business operation in a non-
metropolitan county and will hire at least five new employees within two
years from the date the qualified company enters into an agreement with
the secretary pursuant to K.S.A. 74-50,213, and amendments thereto, shall:
(1) Be eligible to retain 95% of the qualified company's Kansas
payroll withholding taxes for such new employees being paid the county
median wage or higher for a period of up to:
(A) Five years if the median wage or average wage paid to the new
employees is equal to at least 100% of the county median wage;
(B) six years if the median wage or average wage paid to the new
employees is equal to at least 110% of the county median wage;
(C) seven years if the median wage or average wage paid to the new
employees is equal to at least 120% of the county median wage; or
(2) be eligible to retain 95% of the qualified company's Kansas
payroll withholding taxes for such new employees being paid the county
median wage or higher for a period of up to five years if the median wage
or average wage paid to the new employees is equal to at least 100% of the
NAICS code industry average wage.
The secretary shall not approve any application for benefits under this
subsection on and after July 1, 2025.
(c) Any qualified company, approved by the secretary for benefits
pursuant to paragraph subsection (a), that engages in a high-impact project
whereby the qualified company will hire at least 100 new employees
within two years from the date the qualified company enters into an
agreement with the secretary pursuant to K.S.A. 74-50,213, and
amendments thereto, shall be eligible to retain 95% of the qualified
company's Kansas payroll withholding taxes for such new employees
being paid the county median wage or higher for a period of up to:
(1) Seven years if the median wage or average wage paid to the new
employees is equal to at least 100% of the county median wage;
(2) eight years if the median wage or average wage paid to the new
employees is equal to at least 110% of the county median wage;
(3) nine years if the median wage or average wage paid to the new
employees is equal to at least 120% of the county median wage; or
(4) ten10 years if the median wage or average wage paid to the new
employees is equal to at least 140% of the county median wage.
The secretary shall not approve any application for benefits under this
subsection on and after July 1, 2025.
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(d) In the event that a qualified company contracts with a third party
as described in subsection (a), the third party shall remit payments equal to
the amount of Kansas payroll withholding taxes the qualified company is
eligible to retain under this section to the qualified company, and report
such amount to the department of revenue as required pursuant to
subsection (a) of K.S.A. 74-50,214(a), and amendments thereto.
(e) Commencing January 1, 2013, and ending June 30, 2018, any
company, which meets the criteria provided pursuant to the provisions of
K.S.A. 74-50,211, and amendments thereto, that retains the employees of
an existing business unit located in Kansas and enters into an agreement
with the secretary pursuant to K.S.A. 74-50,213, and amendments thereto,
shall be eligible to retain 95% of the qualified company's Kansas payroll
withholding taxes for such employees for a period of up to five years.
(f) (1) Commencing January 1, 2013, and ending June 30, 2018,
pursuant to the provisions of subsection (e), the secretary of commerce, in
the secretary's sole determination, may provide the benefits of the
promoting employment across Kansas act for situations where it is deemed
necessary by the secretary that the state of Kansas provide incentives for a
company or its operations currently located in Kansas to remain in Kansas
so as to keep its retained jobs. The secretary shall establish and verify that
a prospective company has competitive alternatives that it is seriously
considering and that a company's relocation may be imminent.
Furthermore, the secretary shall assess:
(A) Whether the retention of the company or its operations is
important to the economic vitality of the state;
(B) the area where such company or operations is located; or
(C) whether the retention of the company or its operations is
important to a particular industry in the state due to any number of factors
including, but not limited to, the quantity, quality or wages of the retained
jobs involved.
(2) Effective January 1, 2013, and ending June 30, 2018, the secretary
may use the promoting employment across Kansas act in conjunction with
other economic development programs to develop a retention package.
(g) The provisions of this act as in effect prior to the effective date of
this act shall apply to employers who have entered into agreements with
the secretary prior to July 1, 2011. The provisions of this act shall apply to
employers who enter into agreements with the secretary on and after July
1, 2011 2025. The secretary shall not enter into any agreement for benefits
under this section on and after July 1, 2025.
(h) In the event a qualified company entered into an agreement for
benefits under this section prior to January 1, 2013, such qualified
company may request the secretary to extend the benefit term of such
agreement by a period of up to two additional years. If in the secretary's
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discretion it is necessary to provide the qualified company with all benefits
intended under such agreement, the extension may be granted.
Sec. 5. K.S.A. 74-50,213 is hereby amended to read as follows: 74-
50,213. (a) Any qualified company meeting the requirements of K.S.A. 74-
50,212, and amendments thereto, may apply to the secretary for benefits
under this act before July 1, 2025. The application shall be submitted on a
form and in a manner prescribed by the secretary, and shall include: (1)
Evidence that the applicant is a qualified company; and (2) evidence that
the applicant meets the requirements of K.S.A. 74-50,212, and
amendments thereto.
(b) The secretary may either approve or disapprove the application.
Any qualified company whose application is approved shall be eligible to
receive benefits under this act as of the date such qualified company enters
into an agreement with the secretary in accordance with this section. The
secretary shall not approve any application for benefits under this
subsection on and after July 1, 2025.
(c) Upon approval of an application for benefits under this act, the
secretary may enter into an agreement with the qualified company for
benefits under this act. If necessary, the secretary may also enter into an
agreement with any third party described in subsection (a) of K.S.A. 74-
50,212(a), and amendments thereto, or such third party may be a party to
the agreement between the qualified company and the secretary. The
agreement shall commit the secretary to certify to the secretary of revenue:
(1) That the qualified company is eligible to receive benefits under this act;
(2) the number of new employees hired by the qualified company; and (3)
the amount of gross wages being paid to each new employee. The
secretary shall not enter into any agreement for benefits under this section
on and after July 1, 2025.
(d) The agreement between the qualified company and the secretary
shall be entered into before any benefits may be provided under this act,
and shall specify that should the qualified company fail to comply with the
terms and conditions set forth in the agreement, or fails to comply with the
provisions set forth in this act, the secretary may terminate the agreement,
and the qualified company shall not be entitled to any further benefits
provided under this act and shall be required to remit to the state an
amount equal to the aggregate Kansas payroll withholding taxes retained
by the qualified company, or remitted to the qualified company by a third
party, pursuant to this act as of the date the agreement is terminated.
(e) A qualified company that is already receiving benefits pursuant to
this act may apply to the secretary for additional benefits if the qualified
company meets the requirements of K.S.A. 74-50,212, and amendments
thereto. The secretary shall not grant any additional benefits under this
subsection on and after July 1, 2025.
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(f) A qualified company seeking benefits shall be allowed to
participate in the IMPACT program pursuant to K.S.A. 74-50,102 et seq.,
and amendments thereto, but shall not be allowed to participate in any
other program in which any portion of such qualified company's Kansas
payroll withholding taxes have been pledged to finance indebtedness or
transferred to or for the benefit of such company. A qualified company
shall not be allowed to claim any credits under K.S.A. 79-32,153, 79-
32,160a or 79-32,182b, and amendments thereto, if such credits would
otherwise be earned for the hiring of new employees and the qualified
company has retained any Kansas payroll withholding taxes from wages of
such employees. A qualified company shall not be eligible to receive
benefits under K.S.A. 74-50,212, and amendments thereto, and under
K.S.A. 74-50,102 et seq., and amendments thereto, for the same new
employees.
(g) (1) Under no circumstances shall the total amount of benefits
received by the aggregate of all expanding businesses, as such term is
defined in K.S.A. 74-50,211, and amendments thereto, under this act
exceed $4,800,000 in the fiscal year commencing on July 1, 2011,
$6,000,000 in the fiscal year commencing on July 1, 2012, $12,000,000 in
the fiscal year commencing on July 1, 2013, $18,000,000 in the fiscal year
commencing on July 1, 2014, $24,000,000 in the fiscal year commencing
on July 1, 2015, $30,000,000 in the fiscal year commencing on July 1,
2016, $36,000,000 in the fiscal year commencing on July 1, 2017, and
$42,000,000 in any fiscal year commencing on or after July 1, 2018.
(2) Under no circumstances shall the total amount of benefits
received by the aggregate of businesses under subsections (e) or (f) of
K.S.A. 74-50,212, and amendments thereto, exceed $1,200,000 in the
fiscal year commencing on July 1, 2012, $2,400,000 in the fiscal year
commencing on July 1, 2013, $1,200,000 in the fiscal year commencing
on July 1, 2014, $1,200,000 in the fiscal year commencing on July 1,
2015, $1,200,000 in the fiscal year commencing on July 1, 2016, and
$1,200,000 in the fiscal year commencing on July 1, 2017.
(h) The secretary shall adopt rules and regulations necessary to
implement and administer the provisions of this act.
Sec. 6. 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
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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
(C) For tax year 2025:
If the taxable income is: The tax is:
Not over $46,000….....................................5.2% of Kansas taxable income
Over $46,000...............................................$2,392 plus 5.53% of excess
over $46,000
(D) For tax year 2026:
If the taxable income is: The tax is:
Not over $46,000…....................................5.2% of Kansas taxable income
Over $46,000..............................................$2,392 plus 5.45% of excess
over $46,000
(E) For tax year 2027:
If the taxable income is: The tax is:
Not over $46,000…...................................5.2% of Kansas taxable income
Over $46,000.............................................$2,392 plus 5.35% 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
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(C) For tax year 2025:
If the taxable income is: The tax is:
Not over $23,000….....................................5.2% of Kansas taxable income
Over $23,000..............................................$1,196 plus 5.53% of excess
over $23,000
(D) For tax year 2026:
If the taxable income is: The tax is:
Not over $23,000….....................................5.2% of Kansas taxable income
Over $23,000...............................................$1,196 plus 5.45% of excess
over $23,000
(E) For tax year 2027:
If the taxable income is: The tax is:
Not over $23,000........................................5.2% of Kansas taxable income
Over $23,000.............................................$1,196 plus 5.35% of excess
over $23,000
(3) All resident individuals. For all individuals regardless of filing
status, the tax shall be in an amount equal to 5.2% of Kansas taxable
income for tax year 2028, and all tax years thereafter.
(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 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
income of estates and trusts at the rates provided in subsection (a)(2) for
tax years 2018 through 2027 and at the rate provided in subsection (a)(3)
for tax year 2028, and all tax years thereafter.
(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
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income of $2,500 or less, shall have a tax liability of zero.
Sec. 7. K.S.A. 2024 Supp. 79-32,160a is hereby amended to read as
follows: 79-32,160a. (a) For taxable years commencing after December
31, 1999, and before January 1, 2012, any taxpayer who shall invest in a
qualified business facility, as defined in K.S.A. 79-32,154(b), and
amendments thereto, and effective for tax years commencing after
December 31, 2010, and before January 1, 2012, located in an area other
than a metropolitan county as defined in either K.S.A. 74-50,114 or 74-
50,211, and amendments thereto, and also meets the definition of a
business in K.S.A. 74-50,114(b), and amendments thereto, shall be
allowed a credit for such investment, in an amount determined under
subsection (b) or (c), as the case requires, against the tax imposed by the
Kansas income tax act or where the qualified business facility is the
principal place from which the trade or business of the taxpayer is directed
or managed and the facility has facilitated the creation of at least 20 new
full-time positions, against the premium tax or privilege fees imposed
pursuant to K.S.A. 40-252, and amendments thereto, or as measured by the
net income of financial institutions imposed pursuant to article 11 of
chapter 79 of the Kansas Statutes Annotated, and amendments thereto, for
the taxable year during which commencement of commercial operations,
as defined in K.S.A. 79-32,154(f), and amendments thereto, occurs at such
qualified business facility. In the case of a taxpayer who meets the
definition of a manufacturing business in K.S.A. 74-50,114(d), and
amendments thereto, no credit shall be allowed under this section unless
the number of qualified business facility employees, as determined under
K.S.A. 79-32,154(d), and amendments thereto, engaged or maintained in
employment at the qualified business facility as a direct result of the
investment by the taxpayer for the taxable year for which the credit is
claimed equals or exceeds two. In the case of a taxpayer who meets the
definition of a nonmanufacturing business in K.S.A. 74-50,114(f), and
amendments thereto, no credit shall be allowed under this section unless
the number of qualified business facility employees, as determined under
K.S.A. 79-32,154(d), and amendments thereto, engaged or maintained in
employment at the qualified business facility as a direct result of the
investment by the taxpayer for the taxable year for which the credit is
claimed equals or exceeds five. Where an employee performs services for
the taxpayer outside the qualified business facility, the employee shall be
considered engaged or maintained in employment at the qualified business
facility if: (1) The employee's service performed outside the qualified
business facility is incidental to the employee's service inside the qualified
business facility; or (2) the base of operations or, the place from which the
service is directed or controlled, is at the qualified business facility.
(b) The credit allowed by subsection (a) for any taxpayer who invests
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in a qualified business facility that is located in a designated
nonmetropolitan region established under K.S.A. 74-50,116, and
amendments thereto, on or after the effective date of this act, shall be a
portion of the income tax imposed by the Kansas income tax act on the
taxpayer's Kansas taxable income, the premium tax or privilege fees
imposed pursuant to K.S.A. 40-252, and amendments thereto, or the
privilege tax as measured by the net income of financial institutions
imposed pursuant to article 11 of chapter 79 of the Kansas Statutes
Annotated, and amendments thereto, for the taxable year for which such
credit is allowed, but in the case where the qualified business facility
investment was made prior to January 1, 1996, not in excess of 50% of
such tax. Such portion shall be an amount equal to the sum of the
following:
(1) $2,500 for each qualified business facility employee determined
under K.S.A. 79-32,154, and amendments thereto; plus
(2) $1,000 for each $100,000, or major fraction thereof, which shall
be deemed to be 51% or more, in qualified business facility investment, as
determined under K.S.A. 79-32,154, and amendments thereto.
(c) The credit allowed by subsection (a) for any taxpayer who invests
in a qualified business facility that is not located in a nonmetropolitan
region established under K.S.A. 74-50,116, and amendments thereto, and
effective for tax years commencing after December 31, 2010, and before
January 1, 2012, located in an area other than a metropolitan county as
defined in either K.S.A. 74-50,114 or 74-50,211, and amendments thereto,
and that also meets the definition of business in K.S.A. 74-50,114(b), and
amendments thereto, on or after the effective date of this act, shall be a
portion of the income tax imposed by the Kansas income tax act on the
taxpayer's Kansas taxable income, the premium tax or privilege fees
imposed pursuant to K.S.A. 40-252, and amendments thereto, or the
privilege tax as measured by the net income of financial institutions
imposed pursuant to article 11 of chapter 79 of the Kansas Statutes
Annotated, and amendments thereto, for the taxable year for which such
credit is allowed, but in the case where the qualified business facility
investment was made prior to January 1, 1996, not in excess of 50% of
such tax. Such portion shall be an amount equal to the sum of the
following:
(1) $1,500 for each qualified business facility employee as
determined under K.S.A. 79-32,154, and amendments thereto; and
(2) $1,000 for each $100,000, or major fraction thereof, which shall
be deemed to be 51% or more, in qualified business facility investment as
determined under K.S.A. 79-32,154, and amendments thereto.
(d) The credit allowed by subsection (a) for each qualified business
facility employee and for qualified business facility investment shall be a
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one-time credit. If the amount of the credit allowed under subsection (a)
exceeds the tax imposed by the Kansas income tax act on the taxpayer's
Kansas taxable income, the premium tax and privilege fees imposed
pursuant to K.S.A. 40-252, and amendments thereto, or the privilege tax as
measured by the net income of financial institutions imposed pursuant to
article 11 of chapter 79 of the Kansas Statutes Annotated, and amendments
thereto, for the taxable year, or in the case where the qualified business
facility investment was made prior to January 1, 1996, 50% of such tax
imposed upon the amount which exceeds such tax liability or such portion
thereof may be carried over for credit in the same manner in the
succeeding taxable years until the total amount of such credit is used.
Except that, before the credit is allowed, a taxpayer, who meets the
definition of a manufacturing business in K.S.A. 74-50,114(d), and
amendments thereto, shall recertify annually that the net increase of a
minimum of two qualified business facility employees has continued to be
maintained and a taxpayer, who meets the definition of a
nonmanufacturing business in K.S.A. 74-50,114(f), and amendments
thereto, shall recertify annually that the net increase of a minimum of five
qualified business employees has continued to be maintained.
(e) Notwithstanding the foregoing provisions of this section, and
except as otherwise provided in this subsection, any taxpayer qualified and
certified under the provisions of K.S.A. 74-50,131, and amendments
thereto, that prior to making a commitment to invest in a qualified Kansas
business, has filed a certificate of intent to invest in a qualified business
facility in a form satisfactory to the secretary of commerce, shall be
entitled to a credit in an amount equal to 10% of that portion of the
qualified business facility investment that exceeds $50,000 in lieu of the
credit provided in subsection (b)(2) or (c)(2) without regard to the number
of qualified business facility employees engaged or maintained in
employment at the qualified business facility. For tax years beginning on
or after January 1, 2012, for a qualified business facility investment in
Douglas, Johnson, Sedgwick, Shawnee or Wyandotte county, such credit
shall be in an amount equal to 10% of that portion of the qualified business
facility investment that exceeds $1,000,000. Any taxpayer who has filed a
certificate of intent to invest in a qualified business facility pursuant to this
subsection in Douglas, Johnson, Sedgwick, Shawnee or Wyandotte county
prior to December 31, 2011, and commences investments in a qualified
business facility prior to December 31, 2013, may claim credits under
K.S.A. 74-50,131, 74-50,132 and 79-32,160a(e), and amendments thereto,
in an amount equal to 10% of that portion of the qualified business facility
investment that exceeds $50,000. Timing modifications may be authorized
at the discretion of the secretary of commerce and the secretary of revenue
during the transition period. The credit allowed by this subsection shall be
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a one-time credit. If the amount thereof exceeds the tax imposed by the
Kansas income tax act on the taxpayer's Kansas taxable income or the
premium tax or privilege fees imposed pursuant to K.S.A. 40-252, and
amendments thereto, or the privilege tax as measured by net income of
financial institutions imposed pursuant to article 11 of chapter 79 of the
Kansas Statutes Annotated, and amendments thereto, for the taxable year,
the amount thereof that exceeds such tax liability may be carried forward
for credit in the succeeding taxable year or years until the total amount of
the tax credit is used, except that no such tax credit shall be carried
forward for deduction after the 16
th
taxable year succeeding the taxable
year in which such credit initially was claimed, and no carryforward shall
be allowed for deduction in any succeeding taxable year unless the
taxpayer certifies under oath that the taxpayer continues to meet the
requirements of K.S.A. 74-50,131, and amendments thereto, and this act.
In no event shall any credit allowed under this section that expired during
any taxable year prior to the taxable year commencing January 1, 2011, be
revived under the provisions of this act. No tax credit shall be allowed
pursuant to this subsection for tax years commencing after December 31,
2025, except that for taxpayers who have excess unused credit pursuant to
a credit initially claimed under this subsection for a tax year commencing
before January 1, 2026, the credit carryforward provisions of this
subsection still apply.
(f) For projects placed into service on and after January 1, 2021, a
taxpayer may transfer up to 50% of the tax credit allowed under subsection
(e), as provided in this subsection. The taxpayer may make a transfer to
one or more transferees, but the total of all transfers shall not exceed 50%
of the taxpayer's tax credit. The taxpayer shall make the transfer or
transfers within a single tax year. The credit may be transferred to any
individual or entity and shall be claimed in the year the credit was
transferred against the transferee's tax liability for the income tax under the
Kansas income tax act or the premium tax or privilege fees imposed
pursuant to K.S.A. 40-252, and amendments thereto, or the privilege tax as
measured by the net income of financial institutions imposed pursuant to
article 11 of chapter 79 of the Kansas Statutes Annotated, and amendments
thereto. The amount of the credit that exceeds the transferee's tax liability
for such year may be carried forward for credit in the succeeding taxable
year or years until the total amount of the tax credit is used, except that no
such credit shall be carried forward for deduction after the 16
th
taxable
year succeeding the taxable year in which such credit was initially
claimed. The taxpayer or transferee shall provide such documentation of
the tax credit transfer to the secretary of revenue as may be required by the
secretary. No transfer of credits shall be allowed pursuant to this
subsection after December 31, 2025. The credit carryforward provisions
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of this subsection still apply for transferees who have excess unused credit
pursuant to a transfer that occurred before January 1, 2026.
(g) In the event the tax credit earned by the taxpayer and transferred
to a transferee is later disallowed in whole or in part by the secretary of
revenue, the taxpayer that originally earned the tax credit shall be liable for
repayment to the state in the amount disallowed.
(h) For tax years commencing after December 31, 2005, Any
taxpayer claiming credits pursuant to this section, as a condition for
claiming and qualifying for such credits, shall provide information
pursuant to K.S.A. 79-32,243, and amendments thereto, as part of the tax
return in which such credits are claimed. Such credits shall not be denied
solely on the basis of the contents of the information provided by the
taxpayer pursuant to K.S.A. 79-32,243, and amendments thereto.
(i) This section and K.S.A. 79-32,160b, and amendments thereto,
shall be a part of and supplemental to the job expansion and investment
credit act of 1976, and amendments thereto.
Sec. 8. K.S.A. 2024 Supp. 79-32,306 is hereby amended to read as
follows: 79-32,306. (a) For all taxable years commencing after December
31, 2022, and ending as provided in subsection (i), there shall be allowed a
credit against the income tax liability imposed pursuant to the Kansas
income tax act, the privilege tax liability imposed upon any national
banking association, state bank, trust company or savings and loan
association pursuant to article 11 of chapter 79 of the Kansas Statutes
Annotated, and amendments thereto, or the premium tax liability imposed
upon an insurance company pursuant to K.S.A. 40-252, and amendments
thereto, for each qualified development for each year of the credit period,
in an amount equal to the federal tax credit allocated or allowed by the
KHRC to such qualified development, except that there shall be no
reduction in the credit allowable in the first year of the credit period due to
the calculation in section 42(f)(2) of the federal internal revenue code.
(b) The KHRC shall issue an allocation certificate to an owner of a
qualified development to which a credit has been allocated. The KHRC
shall issue an allocation certificate to the qualified development
simultaneously with issuance of federal form 8609 with respect to the
federal tax credits.
(c) All allocations shall be made pursuant to the qualified allocation
plan.
(d) If an owner of a qualified development receiving an allocation of
a credit is a pass-through entity, the owner may allocate the credit among
its partners or members in any manner agreed to by such persons
regardless of whether: (1) Any such person is allocated or allowed any
portion of any federal tax credit with respect to the qualified project; (2)
the allocation of the credit under the terms of the agreement has substantial
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economic effect within the meaning of section 704(b) of the federal
internal revenue code; or (3) any such person is deemed a partner for
federal income tax purposes, if the partner or member would be considered
a partner or member under applicable state law governing such entity and
has been admitted as a partner or member on or prior to the date for filing
the qualified taxpayer's tax return, including any amendments to such tax
return, with respect to the year of the credit. In the case of multiple tiers of
pass-through entities, the credit may be so allocated through any number
of pass-through entities in any manner agreed by the owners of such pass-
through entities, none of which shall be considered a transfer. Any pass-
through entity allocating a credit to its partners or members shall attach a
pass-through certification to its tax return annually. Each partner or
member shall be allowed to claim or further allocate such amount subject
to any restrictions set forth in this act.
(e) An owner of a qualified development to which a credit has been
allocated and each qualified taxpayer to which such owner has allocated a
portion of such credit, if any, shall file with their state income, privilege or
premium tax return a copy of the allocation certificate issued by the
KHRC with respect to such qualified development and a copy of any pass-
through certification, as prescribed by the director.
(f) No credit shall be allocated pursuant to this act unless the qualified
development is the subject of a recorded restrictive covenant requiring the
development to be maintained and operated as a qualified development
and is in accordance with the accessibility and adaptability requirements of
the federal tax credits and title VIII of the civil rights act of 1968, as
amended by the fair housing amendments act of 1988, for a period of 15
taxable years, or such longer period as may be agreed to between the
KHRC and the owner of the qualified development, beginning with the
first taxable year of the credit period.
(g) The allocated credit amount may be taken against the income,
privilege or premium taxes imposed for each taxable year of the credit
period. Any amount of credit that exceeds the income, privilege or
premium tax liability of a qualified taxpayer for a taxable year may be
carried forward as a credit against subsequent years' tax liability up to 11
tax years following the tax year in which the allocation was made and shall
be applied first to the earliest years possible. Any amount of the credit that
is not used shall not be refunded to the taxpayer.
(h) Unless otherwise provided in this act or the context or law
requires otherwise, the KHRC shall determine eligibility for a credit and
allocate credits in accordance with the standards and requirements set forth
in section 42 of the federal internal revenue code. Any combination of
federal tax credits and credits allowed pursuant to this act shall be the least
amount necessary to ensure the financial feasibility of a qualified
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development.
(i) The provisions of the Kansas affordable housing tax credit act,
K.S.A. 2024 Supp. 79-32,304 through 79-32,309, and amendments thereto,
shall be discontinued on April 1, 2025, except that such provisions shall
continue to apply through the credit period, and any applicable carry
forward period, of a Kansas affordable housing tax credit allocation
awarded to the owner of a qualified development by the KHRC before
April 1, 2025. No applications to the KHRC approved on or after April 1,
2025, shall be eligible to receive a state tax credit under the provisions of
this act. No credit shall be allocated or awarded under this act after
March 31, 2025. No credit shall be allowed pursuant to this section for tax
years commencing after December 31, 2025, except as provided in this
subsection for credits allocated or awarded before April 1, 2025.
Sec. 9. K.S.A. 74-50,132, 74-50,212 and 74-50,213 and K.S.A. 2024
Supp. 74-50,107, 79-32,110, 79-32,160a and 79-32,306 are hereby
repealed.
Sec. 10. On and after January 1, 2026, K.S.A. 65-7107, 79-32,204,
79-32,207, 79-32,222, 79-32,262 and 79-32,266 and K.S.A. 2024 Supp.
32-1438 are hereby repealed.
Sec. 11. This act shall take effect and be in force from and after its
publication in the Kansas register.
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