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.

SENATE BILL No. 269
AN ACT concerning taxation; relating to income and privilege taxes; providing that future
tax rate decreases be contingent on exceeding revenue estimates and retaining a
certain amount in the budget stabilization fund; amending K.S.A. 2024 Supp. 79-
1107, 79-1108 and 79-32,110 and repealing the existing sections.
Be it enacted by the Legislature of the State of Kansas:
New Section 1. (a) As used in this section:
(1) "Adjusted consumer price ratio" means the fiscal year
consumer price index divided by the base year consumer price index.
(2) "Adjusted general revenue fund collections" means actual tax
receipt revenues to the state general fund from the Kansas income tax
act and the privilege tax 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.
(3) "Base year revenues" means actual tax receipt revenues to the
state general fund for fiscal year 2024 in the amount of $5,969,395,529
from the Kansas income tax act and the privilege tax 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.
(4) "Base year consumer price index" means a 12-month average
of the not seasonally adjusted consumer price index for all urban
consumers for fiscal year 2024.
(5) "Excess fiscal year general revenue fund collections" means
the positive difference from subtracting the inflation adjusted base year
revenues from the adjusted general revenue fund collections from the
immediately preceding fiscal year.
(6) "Fiscal year consumer price index" means a 12-month average
of the not seasonally adjusted consumer price index for all urban
consumers for the immediately preceding fiscal year.
(7) "Inflation adjusted base year revenues" means the base year
revenues multiplied by the adjusted consumer price ratio.
(b) Commencing on August 15, 2025, and every August 15
thereafter, the director of the budget, in consultation with the director of
legislative research, shall determine whether the total fiscal year
adjusted general revenue fund collections from the immediately
preceding fiscal year are in excess of the inflation adjusted base year
revenues and if the amount of moneys in the budget stabilization fund
established pursuant to K.S.A. 75-6706, and amendments thereto, is
equal to or exceeds 15% of the prior fiscal year's state tax receipt
revenues to the state general fund. If the total fiscal year adjusted
general revenue fund collections from the immediately preceding fiscal
year are in excess of the inflation adjusted base year revenues and the
amount of moneys in the budget stabilization fund is equal to or
exceeds 15% of the prior fiscal year's state tax receipt revenues to the
state general fund, the director of the budget shall certify to the
secretary of revenue the existence of such excess and the amount of the
excess.
(c) In the event that the secretary of revenue certifies that the
adjusted general revenue fund collections from the immediately
preceding fiscal year are in excess of the inflation adjusted base year
revenues and the amount of moneys in the budget stabilization fund is
equal to or exceeds 15% of the prior fiscal year's state tax receipt
revenues to the state general fund , the secretary shall calculate and
publish the income tax and privilege tax rate reduction as a result of the
excess. In calculating the income tax rate reduction, the excess fiscal
year general revenue fund collections shall be computed that would
result in the reduction of the income tax rates pursuant to subsection (d)
in an amount approximately equal to the rate reductions down to the
SENATE BILL No. 269—page 2
nearest 0.01% to go into effect for the next tax year. In calculating the
privilege tax rate reduction pursuant to subsection (d), the reduction
shall be a corresponding rate reduction that is equal to the total
percentage adjustment to the corporate income tax. Such rate
reductions shall remain in effect unless further reduced pursuant to this
section. The income tax brackets and taxable income thresholds
prescribed in K.S.A. 79-32,110(a), and amendments thereto, shall be
adjusted to reflect the changes in income tax rates.
(d) The secretary shall first compute the reduction of the income
tax rates pursuant to K.S.A. 79-32,110(a), and amendments thereto, that
decreases proportionally all tax rates in effect. Once the lower income
tax rate is decreased to 4%, there shall be no further reductions to the
lower income tax rate and further reductions shall only be applied to
reduce the higher income tax rate in effect. Upon the higher income tax
rate being decreased to 4%, no further reductions shall occur to K.S.A.
79-32,110(a), and amendments thereto. The secretary shall then
compute decreases to:
(1) The surtax imposed pursuant to K.S.A. 79-32,110(c), and
amendments thereto. The surtax shall be decreased until the combined
normal and surtax rates equal 4% that are imposed pursuant to K.S.A.
79-32,110(c), and amendments thereto. Once the combined normal and
surtax rates pursuant to K.S.A. 79-32,110( c), and amendments thereto,
equal 4%, no further reductions shall occur;
(2) the normal tax imposed pursuant to K.S.A. 79-1107, and
amendments thereto. The normal tax shall be decreased until the
combined normal and surtax rates equal 2.6% that are imposed
pursuant to K.S.A. 79-1107, and amendments thereto. Once the
combined normal and surtax rates pursuant to K.S.A. 79-1107, and
amendments thereto, equal 2.6%, no further reductions shall occur; and
(3) the normal tax imposed pursuant to K.S.A. 79-1108, and
amendments thereto. The normal tax shall be decreased until the
combined normal and surtax rates equal 2.62% that are imposed
pursuant to K.S.A. 79-1108, and amendments thereto. Once the
combined normal and surtax rates pursuant to K.S.A. 79-1108, and
amendments thereto, equal 2.62%, no further reductions shall occur.
Sec. 2. K.S.A. 2024 Supp. 79-1107 is hereby amended to read as
follows: 79-1107. (a) Every national banking association and state bank
located or doing business within the state shall pay to the state for the
privilege of doing business within the state a tax according to or
measured by its net income for the next preceding taxable year to be
computed as provided in this act. Such tax shall consist of a normal tax
and a surtax and shall be computed as follows unless otherwise
modified pursuant to section 1, and amendments thereto:
(1) For tax year 2024, and all tax years thereafter, the normal tax
shall be an amount equal to 1.94% of such net income; and
(2) the surtax shall be an amount equal to 2.125% of such net
income in excess of $25,000.
(b) The tax levied shall be in lieu of ad valorem taxes which might
otherwise be imposed by the state or political subdivisions thereof upon
shares of capital stock or the intangible assets of national banking
associations and state banks.
Sec. 3. K.S.A. 2024 Supp. 79-1108 is hereby amended to read as
follows: 79-1108. (a) Every trust company and savings and loan
association located or doing business within the state shall pay to the
state for the privilege of doing business within the state a tax according
to or measured by its net income for the next preceding taxable year to
be computed as provided in this act. Such tax shall consist of a normal
tax and a surtax and shall be computed as follows unless otherwise
modified pursuant to section 1, and amendments thereto:
SENATE BILL No. 269—page 3
(1) For tax year 2024, and all tax years thereafter, the normal tax
on every trust company and savings and loan association shall be an
amount equal to 1.93% of such net income; and
(2) the surtax on every trust company and savings and loan
association shall be an amount equal to 2.25% of such net income in
excess of $25,000.
(b) The tax levied shall be in lieu of ad valorem taxes which might
otherwise be imposed by the state or political subdivision thereof upon
shares of capital stock or other intangible assets of trust companies and
savings and loan associations.
Sec. 4. 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 unless otherwise modified pursuant to section
1, and amendments thereto:
(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
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
(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
(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 or
section 1, and amendments thereto:
(1) The normal tax shall be in an amount equal to 4% of the
SENATE BILL No. 269—page 4
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).
(e) Notwithstanding the provisions of subsections (a) and (b), for
tax years 2018 through 202 3, married individuals filing joint returns
with taxable income of $5,000 or less , and all other individuals with
taxable income of $2,500 or less, shall have a tax liability of zero.
Sec. 5. K.S.A. 2024 Supp. 79-1107, 79-1108 and 79-32,110 are
hereby repealed.
Sec. 6. This act shall take effect and be in force from and after its
publication in the statute book.
I hereby certify that the above BILL originated in the
SENATE, and passed that body
__________________________
SENATE adopted
Conference Committee Report ________________
_________________________
President of the Senate.
_________________________
Secretary of the Senate.

Passed the HOUSE
as amended _________________________
HOUSE adopted
Conference Committee Report ________________
_________________________
Speaker of the House.
_________________________
Chief Clerk of the House.
APPROVED _____________________________
_________________________
Governor.