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As Amended by House Committee
Session of 2025
HOUSE BILL No. 2406
By Committee on Taxation
Requested by Representative A. Smith
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AN ACT concerning property taxation; relating to exemptions; providing
tax exemption eligibility for telecommunication, railroad,
commercial and industrial machinery and equipment that is currently
ineligible for tax exemption due to such property being acquired or
transported into this state on or before June 30, 2006; amending K.S.A.
79-223 and K.S.A. 2025 Supp. 79-224 and repealing the existing
section sections.
Be it enacted by the Legislature of the State of Kansas:
Section 1. K.S.A. 79-223 is hereby amended to read as follows: 79-
223. (a) It is the purpose of this section to promote, stimulate, foster and
encourage new investments in commercial and industrial machinery and
equipment in the state of Kansas, to contribute to the economic recovery of
the state, to enhance business opportunities in the state, to encourage the
location of new businesses and industries in the state as well as the
retention and expansion of existing businesses and industries and to
promote the economic stability of the state by maintaining and providing
employment opportunities, thereby contributing to the general welfare of
the citizens of the state, by exempting from property taxation all newly
purchased or leased commercial and industrial machinery and equipment,
including machinery and equipment transferred into this state for the
purpose of expanding an existing business or for the creation of a new
business.
(b) The following described property, to the extent specified by this
section, shall be and is hereby exempt from all property or ad valorem
taxes levied under the laws of the state of Kansas:
First. Commercial and industrial machinery and equipment acquired by
qualified purchase or lease made or entered into after June 30, 2006, as the
result of a bona fide transaction not consummated for the purpose of
avoiding taxation.
Second. Commercial and industrial machinery and equipment
transported into this state after June 30, 2006, for the purpose of expanding
an existing business or creation of a new business.
(c) Any purchase, lease or transportation of commercial and industrial
machinery and equipment consummated for the purpose of avoiding
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taxation shall subject the property to the penalty provisions of K.S.A. 79-
1422 and 79-1427a, and amendments thereto. The county appraiser shall
not reclassify any property that is properly classified for property tax
purposes within subclass (5) of class 2 of section 1 of article 11 of the
constitution of the state of Kansas.
(d) As used in this section:
(1) "Acquired" shall does not include the transfer of property
pursuant to an exchange for stock securities , or the transfer of assets from
one going concern to another due to a merger, reorganization or other
consolidation;
(2) "Commercial and industrial machinery and equipment" means
property classified for property tax purposes within subclass (5) of class 2
of section 1 of article 11 of the constitution of the state of Kansas , but
shall. "Commercial and industrial machinery and equipment" does not
include any electric generation facility or addition to an electric generation
facility that is used predominately predominantly to produce and generate
electricity utilizing renewable energy resources or technologies as defined
in K.S.A. 79-201, and amendments thereto;
(3)(2) "qualified lease" means a lease of commercial and industrial
machinery and equipment for not less than 30 days for fair and valuable
consideration where such machinery and equipment is physically
transferred to the lessee to be used in the lessee's business or trade; and
(4)(3) "qualified purchase" means a purchase of commercial and
industrial machinery and equipment for fair and valuable consideration
where such machinery and equipment is physically transferred to the
purchaser to be used in the purchaser's business or trade.
(e) The secretary of revenue is hereby authorized to adopt rules and
regulations to administer the provisions of this section.
Sec. 2. K.S.A. 2025 Supp. 79-224 is hereby amended to read as
follows: 79-224. (a) It is the purpose of this section to promote,
stimulate, foster and encourage new investments in
telecommunications machinery and equipment and railroad
machinery and equipment in the state of Kansas, to recognize the
dramatic changes within the telecommunications industry, to
contribute to the economic recovery of the state, to enhance business
opportunities in the state, to encourage the location of new businesses
and industries in the state as well as the retention and expansion of
existing businesses and industries and to promote the economic
stability of the state by maintaining and providing employment
opportunities, thereby contributing to the general welfare of the
citizens of the state, by exempting from property taxation certain
newly purchased or leased telecommunications machinery and
equipment and railroad machinery and equipment, including all such
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HB 2406—Am. by HC 3
machinery and equipment transferred into this state for the purpose
of expanding an existing business or for the creation of a new business.
(b) The following described property, to the extent specified by
this section, shall be and is hereby exempt from all property or ad
valorem taxes levied under the laws of the state of Kansas:
First. Telecommunications machinery and equipment and railroad
machinery and equipment acquired by qualified purchase or lease
made or entered into after June 30, 2006, as the result of a bona fide
transaction not consummated for the purpose of avoiding taxation.
Second. Telecommunications machinery and equipment and
railroad machinery and equipment transported into this state after
June 30, 2006, for the purpose of expanding an existing business or
creation of a new business.
(c) As used in this section:
(1) "Acquired" shall not include the transfer of property pursuant to
an exchange for stock securities, or the transfer of assets from one going
concern to another due to a merger, reorganization or other consolidation;
(2) "Qualified lease" means a lease of telecommunications
machinery and equipment or railroad machinery and equipment for
not less than 30 days for fair and valuable consideration where such
machinery and equipment is physically transferred to the lessee to be
used in the lessee's business or trade;
(3)(2) "qualified purchase" means a purchase of
telecommunications machinery and equipment or railroad machinery
and equipment for fair and valuable consideration where such
machinery and equipment is physically transferred to the purchaser to
be used in the purchaser's business or trade;
(4)(3) "railroad machinery and equipment" means railroad
machinery and equipment classified for property tax purposes within
subclass (3) of class 2 of section 1 of article 11 of the constitution of the
state of Kansas; and
(5)(4) "telecommunications machinery and equipment" means
network administrative assets; central office equipment; information,
station and customer equipment; and outside plant equipment of a
telecommunication company. "Telecommunications machinery and
equipment" includes machinery and equipment placed in inventory or
work-in-progress.
(d) The secretary of revenue is hereby authorized to adopt rules
and regulations to administer the provisions of this section.
Sec. 2. 3. K.S.A. 79-223 is and K.S.A. 2025 Supp. 79-224 are
hereby repealed.
Sec. 3. 4. This act shall take effect and be in force from and after its
publication in the statute book.
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