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Session of 2026
HOUSE BILL No. 2714
By Committee on Taxation
Requested by Adam Kazda on behalf of Anheuser Busch
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AN ACT concerning taxation; relating to gallonage tax; providing for a
decreased gallonage tax on beer and cereal malt beverage that are
manufactured and packaged in the United States; amending K.S.A.
2025 Supp. 41-501 and repealing the existing section.
Be it enacted by the Legislature of the State of Kansas:
Section 1. K.S.A. 2025 Supp. 41-501 is hereby amended to read as
follows: 41-501. (a) As used in this section and K.S.A. 41-501a, and
amendments thereto:
(1) "Gallon" means wine gallon.
(2) "Federal area" means any lands or premises which that are located
within the exterior boundaries of this state and which are held or acquired
by or for the use of the United States or any department, establishment or
agency of the United States.
(3) "Malt product" means malt syrup, malt extract, liquid malt or
wort.
(b) (1) For the purpose of raising revenue a tax is imposed upon the
manufacturing, using, selling, storing or purchasing of alcoholic liquor,
cereal malt beverage or malt products in this state or a federal area at a rate
of:
(A) $.18$.06 per gallon on beer and cereal malt beverage that are
manufactured and packaged within the United States;
(B) $.18 per gallon on beer and cereal malt beverage that are
manufactured and imported from outside the United States;
(C) $.20 per gallon on all wort or liquid malt;
(D) $.10 per pound on all malt syrup or malt extract;
(E) $.30 per gallon on wine containing 16% or less alcohol by
volume;
(F) $.75 per gallon on wine containing more than 16% alcohol by
volume; and
(G) $2.50 per gallon on alcohol and spirits.
(2) The tax imposed by this section shall be paid only once and shall
be paid by the person in this state or federal area who first manufactures,
uses, sells, stores, purchases or receives the alcoholic liquor or cereal malt
beverage. The tax shall be collected and paid to the director as provided in
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this act. If the alcoholic liquor or cereal malt beverage is manufactured and
sold in this state or a federal area, the tax shall be paid by the
manufacturer, microbrewery, microdistillery or farm winery producing it.
If the alcoholic liquor or cereal malt beverage is imported into this state by
a distributor for the purpose of sale at wholesale in this state or a federal
area, the tax shall be paid by the distributor, and in no event shall such tax
be paid by the manufacturer unless the alcoholic liquor or cereal malt
beverage is manufactured in this state. If not to exceed one gallon, or
metric equivalent, per person of alcoholic liquor has been purchased by a
private citizen outside the borders of the United States and is brought into
this state by the private citizen in such person's personal possession for
such person's own personal use and not for sale or resale, such import is
lawful and no tax payment shall be due thereon.
(c) Manufacturers, microbreweries, microdistilleries, farm wineries or
distributors at wholesale of alcoholic liquor or cereal malt beverage shall
be exempt from the payment of the gallonage tax imposed on alcoholic
liquor and cereal malt beverage, upon satisfactory proof, including bills of
lading furnished to the director by affidavit or otherwise as the director
requires, that the liquor or cereal malt beverage was manufactured in this
state but was shipped out of the state for sale and consumption outside the
state.
(d) Wines manufactured or imported solely and exclusively for
sacramental purposes and uses shall not be subject to the tax provided for
by this section.
(e) The tax provided for by this section is not imposed upon:
(1) Any alcohol or wine, whether manufactured in or imported into
this state, when sold to a nonbeverage user licensed by the state, for use in
the manufacture of any of the following when they are unfit for beverage
purposes: Patent and proprietary medicines and medicinal, antiseptic and
toilet preparations; flavoring extracts and syrups and food products;
scientific, industrial and chemical products; or scientific, chemical,
experimental or mechanical purposes; or
(2) the privilege of engaging in any business of interstate commerce
or otherwise, which business may not be made the subject of taxation by
this state under the constitution and statutes of the United States.
(f) The tax imposed by this section shall be in addition to all other
taxes imposed by the state of Kansas or by any municipal corporation or
political subdivision thereof.
(g) Retail sales of alcoholic liquor, sales of beer to consumers by
microbreweries and sales of wine to consumers by farm wineries shall not
be subject to the tax imposed by the Kansas retailers' sales tax act but shall
be subject to the enforcement tax provided for in this act.
(h) Notwithstanding any ordinance to the contrary, no city shall
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impose an occupation or privilege tax on the business of any person, firm
or corporation licensed as a manufacturer, distributor, microbrewery,
microdistillery, farm winery, retailer or nonbeverage user under this act
and doing business within the boundaries of the city except as specifically
authorized by K.S.A. 41-310, and amendments thereto.
(i) The director shall collect the taxes imposed by this section and
shall account for and remit all moneys collected from the tax 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 in the state treasury and the state
treasurer shall credit 1/10 of the moneys collected from taxes imposed upon
alcohol and spirits under subsection (b)(1) to the community alcoholism
and intoxication programs fund created by K.S.A. 41-1126, and
amendments thereto, and shall credit the balance of the moneys collected
to the state general fund.
(j) If any alcoholic liquor manufactured in or imported into this state
is sold to a licensed manufacturer or distributor of this state to be used
solely as an ingredient in the manufacture of any beverage for human
consumption, the tax imposed upon the manufacturer or distributor shall
be reduced by the amount of the taxes which that have been paid under
this section as to the alcoholic liquor so used.
(k) The tax provided for by this section is not imposed upon alcohol
or wine used by any school or college for scientific, chemical,
experimental or mechanical purposes or by hospitals, sanitoria or other
institutions caring for the sick. Any school, college, hospital, sanatorium or
other institution caring for the sick may import alcohol or wine for
scientific, chemical, experimental, mechanical or medicinal purposes by
making application to the director for a permit to import it and receiving
such a permit. Application for the permit shall be on a form prescribed and
furnished by the director, and a separate permit shall be required for each
purchase of alcohol or wine. A fee of $2 shall accompany each application.
All permits shall be issued in triplicate to the applicant and shall be under
the seal of the office of the director. Two copies of the permit shall be
forwarded by the applicant to the microbrewery, microdistillery, farm
winery, manufacturer or distributor from which the alcohol or wine is
purchased, and the microbrewery, microdistillery, farm winery,
manufacturer or distributor shall return to the office of the director one
copy of the permit with its shipping affidavit and invoice. Within 10 days
after receipt of any alcohol or wine, the school, college, hospital or
sanatorium ordering it shall file a report in the office of the director upon
forms furnished by the director, showing the amount of alcohol or wine
received, the place where it is to be stored, from whom it was received, the
purpose for which it is to be used and such other information as required
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by the director. Any school, college, hospital, sanatorium or institution
caring for the sick, which that complies with the provisions of this
subsection, shall not be required to have any other license to purchase
alcohol or wine from a microbrewery, microdistillery, farm winery,
manufacturer or distributor.
Sec. 2. K.S.A. 2025 Supp. 41-501 is hereby repealed.
Sec. 3. This act shall take effect and be in force from and after its
publication in the statute book.
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