Kansas 2025-2026 Regular Session

Kansas Senate Bill SB277

Introduced

2/19/25

Refer

2/20/25

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.

Latest KS SB277 Activity

View All Events: KS 2025-2026 Regular Session SB277

Companion Bills

No companion bills found.

Previously Filed As

KS SB52

Increasing the income limit for the exemption of social security benefits and exempting certain retirement plan income from Kansas income tax.

KS HB2282

Exempting all social security benefits from Kansas income tax.

KS SB110

Exempting all social security benefits from Kansas income tax.

KS HB2284

Providing an income tax rate of 5.25% for individuals, exempting all social security benefits from Kansas income tax, increasing the standard deduction by a cost-of-living adjustment, increasing the Kansas personal exemption, decreasing the privilege tax normal tax, establishing a 0% state rate for sales and use taxes for food and food ingredients on April 1, 2024, and increasing the extent of property tax exemption for residential property from the statewide school levy.

KS SB539

Simplifying income tax rates for individuals, increasing the standard deduction and the Kansas personal exemption, eliminating the income limit for the income tax subtraction modification exempting social security benefits, establishing a child tax credit, increasing the extent of property tax exemption for residential property from the statewide school levy, decreasing the privilege tax normal tax rate and establishing a 0% state rate for sales and use taxes for sales of food and food ingredients on July 1, 2024.

KS HB2837

Simplifying income tax rates for individuals, increasing the the Kansas personal exemption, increasing the income limit for an income tax subtraction modification for social security income, increasing the extent of property tax exemption for residential property from the statewide school levy, decreasing the privilege tax normal tax rate and establishing a 0% state rate for sales and use taxes for sales of food and food ingredients on July 1, 2024.

KS HB2433

Allowing a taxpayer to elect the taxable year in which a subtraction modification for contributions to a qualified tuition program would be applied.

KS SB169

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.

KS SB377

Substitute for SB 377 by Committee on Assessment and Taxation - Providing an income tax rate of 5.25% for individuals, increasing the income limit for the income tax subtraction modification for social security income, increasing the standard deduction by a cost-of-living adjustment, increasing the Kansas personal exemption, decreasing the privilege tax normal tax, establishing a 0% state rate for sales and use taxes for food and food ingredients on April 1, 2024, and increasing the extent of property tax exemption for residential property from the statewide school levy.

KS SB33

Exempting all social security benefits from Kansas income tax, providing income tax subtraction modifications for retirement plan amounts, federal work opportunity tax credit and employee retention credit disallowances and the carryforward of certain net operating losses, increasing the Kansas standard deduction by a cost-of-living adjustment and excluding social security payments from household income and increasing the appraised value threshold for eligibility of seniors and disabled veterans related to increased homestead property tax refund claims.

Similar Bills

KS SB126

Providing an individual income tax credit for certain residential solar and wind energy property expenditures, a subtraction modification to permit the carryforward of certain net operating losses for individuals and a subtraction modification for the federal work opportunity tax credit and the employee retention credit disallowances.

KS HB2465

Enacting the adoption savings account act allowing individuals to establish adoption savings accounts with certain financial institutions, providing eligible expenses, requirements and restrictions for such accounts and establishing addition and subtraction modifications for contributions to such accounts under the Kansas income tax act, increasing the income tax credit amount for adoption expenses, establishing an income, privilege and premium tax credit for contributions to eligible charitable organizations operating pregnancy centers or residential maternity facilities and providing for a sales tax exemption for purchases by pregnancy resource centers and residential maternity facilities.

KS SB306

Including losses from investments in technology-enabled fiduciary financial institutions in Kansas adjusted gross income for income tax purposes.

KS SB110

Exempting all social security benefits from Kansas income tax.

KS SB40

Permitting the carryforward of certain net operating losses for individuals for Kansas income tax purposes and excluding social security payments from household income and increasing the appraised value and household income thresholds for eligibility of seniors and disabled veterans related to increased property tax homestead claims.

KS SB360

Allowing a taxpayer to elect the taxable year in which a subtraction modification for contributions to a 529 program account, ABLE account or first-time home buyer savings account would be applied and authorizing the state treasurer to appoint a 529 program advisory committee.

KS HB2107

Increasing the income limit to qualify for the income tax subtraction modification for social security income.

KS HB2109

Increasing the income limit for the income tax subtraction modification for social security income and providing that all social security benefits qualify for the subtraction modification commencing in tax year 2026.