Providing for future decreased income tax rates contingent on retention of a 7.5% state general fund ending balance.
Impact
The proposed changes in HB2175 are intended to provide a clear guideline for the adjustment of income tax rates that residents would face in the coming years. By establishing a condition that links tax rate decreases to the state's financial health, the bill emphasizes fiscal responsibility and aims to reassure both taxpayers and fiscal analysts about the management of the state’s budget. This connection could lead to significant alterations in revenue generation over time, potentially benefiting taxpayers if the criteria are met.
Summary
House Bill 2175 pertains to income taxation, specifically focusing on amending the tax rates for resident individuals in Kansas. The legislation introduces a structure for future reductions in income tax rates based on the condition that the state maintains a minimum ending balance of 7.5% in the state general fund. The bill outlines the specific tax rates that would apply for the fiscal years following its enactment, aiming for a more equitable tax system while promoting fiscal stability within the state treasury.
Contention
Debate surrounding HB2175 centers on the perceived fairness and viability of linking tax rates to the state’s fiscal conditions. Proponents argue that it ensures a responsible approach to taxation, ensuring that rate decreases can only occur when the state can afford them. Critics, however, may raise concerns about potential budgetary constraints that could hinder essential funding for public services. Furthermore, the specific tax rates set forth in the bill could evoke discussions around their adequacy in appealing to all demographics within Kansas.
Providing an income tax rate of 5% for individuals and corporations, decreasing the surtax for entities subject to the privilege tax and providing that future income tax rate decreases be contingent on exceeding revenue estimates.
Providing an income tax rate of 5% for individuals and corporations, decreasing the surtax for entities subject to the privilege tax and providing that future income tax rate decreases be contingent on exceeding revenue estimates.
Providing that future income tax and privilege tax rate decreases be contingent on exceeding revenue estimates and retaining a certain amount in the budget stabilization fund.
Providing for the apportionment of business income by the single sales factor and the apportionment of financial institution income by the receipts factor, deductions from income when using the single sales factor and receipts factor and the decrease in corporate income tax rates.
House Substitute for SB 169 by Committee on Taxation - providing an income tax rate of 5.15% for individuals and decreasing the normal tax for corporations, increasing the income limit for the income tax subtraction modification for social security income, increasing the standard deduction by a cost-of-living adjustment, discontinuing the food sales tax credit, decreasing the privilege tax normal tax, establishing a 0% state rate for sales and use taxes for food and food ingredients on January 1, 2024, and increasing the extent of property tax exemption for residential property from the statewide school levy.
Senate Substitute for HB 2201 by Committee on Assessment and Taxation - Decreasing the corporate income tax rate and eliminating certain unused tax credits.
Providing an income tax rate of 4.95% for individuals and decreasing the normal tax for corporations, increasing the income limit for the income tax subtraction modification for social security income and providing that all social security income qualifies for the subtraction modification commencing in tax year 2026, increasing the Kansas standard deduction for individuals and further increasing the standard deduction by a cost-of-living adjustment, discontinuing the food sales tax credit, decreasing the privilege tax surtax, establishing a 0% state rate for sales and use taxes for food and food ingredients on July 1, 2023, and increasing the extent of property tax exemption for residential property from the statewide school levy.