Eliminating certain tax credits, exemptions, incentives, refunds and limitations, a transitional adjustment, a checkoff and a restoration program administered by the secretary that have expired or are no longer applicable.

Session of 2025
SENATE BILL No. 296
By Committee on Assessment and Taxation
3-12
AN ACT concerning the department of revenue; eliminating certain tax
credits, exemptions, incentives, refunds and limitations, a transitional
adjustment, a checkoff and a restoration program administered by the
secretary that have expired or are no longer applicable; providing
certain technical changes to remove or modify statutory cross
references; amending K.S.A. 74-50,136, 74-8947, 75-3712, 75-4275,
79-225, 79-255 and 79-32,140a and K.S.A. 2024 Supp. 79-32,117, 79-
32,143a and 79-32,160a; also repealing K.S.A. 75-3713e, 79-201h, 79-
1705, 79-3221f, 79-3288a, 79-32,117a, 79-32,117b, 79-32,117c, 79-
32,117d, 79-32,117e, 79-32,140, 79-32,160b, 79-32,181, 79-32,181a,
79-32,192, 79-32,193, 79-32,206, 79-32,214, 79-32,215, 79-32,238,
79-32,239, 79-32,240, 79-32,241, 79-32,244, 79-32,257, 79-32,258,
79-32,259, 79-32,260, 79-32,262, 79-32,264 and 79-32,272 and K.S.A.
2024 Supp. 79-32,203.
Be it enacted by the Legislature of the State of Kansas:
Section 1. K.S.A. 74-50,136 is hereby amended to read as follows:
74-50,136. (a) The provisions of this section shall be known and may be
cited as the "economic revitalization and reinvestment act."
(b) The purpose of the economic revitalization and reinvestment act is
to foster Kansas employment by encouraging product development and
engineering leading to new manufactured products in Kansas.
(c) As used in this act:
(1) "Base eligibility period" means the three taxable years
immediately preceding the date of application for benefits under this act.
(2) "Eligible aviation business" means a person, corporation,
partnership or other entity engaged in the aviation manufacturing or
service industry and doing business in Kansas that satisfies conditions
imposed by the secretary, which may include, among other conditions, that
the person, corporation, partnership or other entity:
(A) Paid at least $150,000,000 in average annual gross Kansas
compensation, according to reports filed with the secretary of labor, during
the base eligibility period;
(B) paid at least $50,000 of average annual gross compensation per
Kansas employee during the base eligibility period;
(C) has invested at least $500,000,000 in real and tangible personal
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property located within and currently used in the operation of a business in
Kansas; and
(D) is described by the north American industrial classification
system as being in the manufacturing or service sector.
(3) "Eligible aviation project" means a research, development,
engineering or manufacturing project:
(A) Undertaken by an eligible aviation business relating to the
development of a new or improved business component or product and
may include, but not be limited to, product development and design,
applied research, manufacturing, improvement, replacement or acquisition
of real or personal property and modernization and retooling of existing
property in Kansas,;
(B) for which the eligible aviation business proposes to invest not less
than $500,000,000 in Kansas in direct connection with the eligible aviation
project of not less than $500,000,000 in Kansas; and
(C) for which the eligible aviation business proposes to employ up to
4,000 full-time employees in Kansas, as defined in K.S.A. 74-50,114, and
amendments thereto.
(4) "Eligible business" means a person, corporation, partnership or
other entity doing business in Kansas that satisfies conditions imposed by
the secretary, which may include, among other conditions, that the person,
corporation, partnership or other entity:
(A) Paid at least $600,000,000 in average annual gross Kansas
compensation, according to reports filed with the secretary of labor, during
the base eligibility period; and
(B) paid at least $50,000 of average annual gross compensation per
Kansas employee during the base eligibility period; and
(C) has invested at least $1,000,000,000 in real and tangible personal
property located within and currently used in the operation of a business in
Kansas; and
(D) is described by North American industrial classification system as
being in the manufacturing sector.
(5) "Eligible project" means a research, development, engineering or
manufacturing project:
(A) Undertaken by an eligible business relating to the development of
a new or improved business component or product and may include, but
not be limited to, product development and design, applied research,
manufacturing, improvement, replacement or acquisition of real or
personal property and modernization and retooling of existing property in
Kansas,;
(B) for which the eligible business proposes to invest not less than
$500,000,000 in Kansas in direct connection with the eligible project of
not less than $500,000,000 in Kansas; and
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(C) for which the eligible business proposes to employ up to 4,000
full-time employees in Kansas, as defined in K.S.A. 74-50,114, and
amendments thereto.
(6) "Eligible wind or solar energy business" means a person,
corporation, partnership or other entity engaged in the wind or solar energy
manufacturing industry and doing business in Kansas that satisfies
conditions imposed by the secretary, which may include among other
conditions, that the person, corporation, partnership or other entity:
(A) Pay at least $32,500 of average annual compensation per Kansas
employee; and
(B) is described by the North American industrial classification
system as being in the manufacturing sector.
(7) "Eligible wind or solar energy project" means a research,
development, engineering or manufacturing project:
(A) Undertaken by an eligible wind or solar energy business relating
to the production of a business component or product and may include, but
not be limited to, product development and design, applied research,
manufacturing, improvement, replacement or acquisition of real or
personal property and modernization and retooling of existing property in
Kansas,;
(B) for which the eligible wind or solar energy business proposes to
invest not less than $30,000,000 in Kansas in direct connection with the
eligible wind or solar energy project of not less than $30,000,000 in
Kansas; and
(C) for which the eligible wind or solar energy business proposes to
employ at least 200 full-time employees in Kansas within five years, as
defined in K.S.A. 74-50,114, and amendments thereto.
(8) "Gross compensation" means gross wages and benefits paid to or
on behalf of employees receiving wages.
(9) "Secretary" means the secretary of commerce.
(d) A person, corporation, partnership or other entity proposing to
undertake an eligible project, eligible aviation project or eligible wind or
solar energy project may apply to the secretary to enter into an agreement
for benefits under this act. The application shall include (1) evidence that
the applicant is an "eligible business," "eligible aviation business" or
"eligible wind or solar energy business " as defined in subsection (c) and
(2) a detailed description of the eligible project, eligible aviation project or
eligible wind or solar energy project.
(e) Upon receipt of an application described in subsection (d), if the
secretary finds that the application is from an eligible business, eligible
aviation business or eligible wind or solar energy business and that the
project constitutes an eligible project, eligible aviation project or eligible
wind or solar energy project, the secretary may enter into an agreement
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with the eligible business, eligible aviation business or eligible wind or
solar energy business for benefits under this act. Such agreement for
benefits shall be subject to review and approval of the state finance council
created by K.S.A. 75-3708, and amendments thereto, acting on this matter
which is hereby characterized as a matter of legislative delegation and
subject to the guidelines prescribed in subsection (c) of K.S.A. 75-
3711c(c), and amendments thereto. The agreement shall commit the
secretary to request that the Kansas development finance authority issue
bonds pursuant to the Kansas development finance authority act, K.S.A.
74-8901 et seq., and amendments thereto, to finance the eligible project for
the benefit of the eligible business in an aggregate principal amount not to
exceed $500,000,000, plus costs of issuance, costs of credit enhancement,
reserve funds and capitalized interest, or in the case of an eligible aviation
project in a principal amount not to exceed $33,000,000 for a single
eligible aviation project or in the case of an eligible wind or solar energy
project in a principal amount not to exceed $5,000,000 for a single eligible
wind or solar energy project and in an aggregate principal amount not to
exceed $150,000,000 for all eligible aviation, wind or solar energy
projects, plus costs of issuance, costs of credit enhancement, reserve funds
and capitalized interest, and shall commit the eligible business, eligible
aviation business or eligible wind or solar energy business to pay the
principal of and interest on such obligations, except that during the period
from the issuance of such bonds through the maturity of such obligations
but not to exceed 20 years revenue realized from withholding upon Kansas
wages paid by the eligible business, eligible aviation business or eligible
wind or solar energy business pursuant to K.S.A. 79-3294 et seq., and
amendments thereto, which is necessary to pay the principal and interest
on such obligations shall be credited to the special economic revitalization
fund created in subsection (h), and shall be transferred by the state
treasurer to pay principal and interest on such obligations as provided by
law. The agreement shall further specifically provide that if the revenue
from the withholding upon Kansas wages is insufficient to pay principal
and interest on the bonds, the eligible business, eligible aviation business
or eligible wind or solar energy business shall remain obligated to make
such payments. The terms and conditions with respect to the obligations
shall be set forth in the agreement or in the financing documents relating to
the issuance of the bonds. In the event the eligible business, eligible
aviation business or eligible wind or solar energy business terminates,
cancels or reduces the scope of the eligible project, eligible aviation
project or eligible wind or solar energy project approved by the secretary,
the agreement shall provide that with respect to debt service, the eligible
business, eligible aviation business or eligible wind or solar energy
business shall remain responsible for payment of the entire outstanding
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principal as well as any interest still outstanding, and no moneys
remaining in the special economic revitalization fund shall be made
available for the purpose of paying the remaining principal and interest
portion of the eligible business', eligible aviation business' or eligible wind
or solar energy business' debt service obligation.
(f) Income tax refunds and balances due resulting from withholding
upon Kansas wages paid by the eligible business, eligible aviation business
or eligible wind or solar energy business pursuant to K.S.A. 79-3294 et
seq., and amendments thereto, shall be reconciled on at least an annual
basis by a method defined in the agreement described in subsection (e).
(g) The Kansas development finance authority is hereby authorized to
issue obligations, for the purpose of financing the eligible project, eligible
aviation project or eligible wind or solar energy project provided in
subsection (e), in a principal amount not to exceed the amount specified in
subsection (e). The maximum maturity of bonds issued pursuant to this act
shall be 20 years, unless the secretary shall find and determine that a
maturity greater than 20 years, but in no event greater than 30 years, is
necessary for economic feasibility of the eligible project, eligible aviation
project or eligible wind or solar energy project of the eligible business,
eligible aviation business or eligible wind or solar energy business.
(h) The state treasurer shall credit all revenue collected or received
from withholding upon Kansas wages paid by a taxpayer which is an
eligible business, eligible aviation business or eligible wind or solar energy
business with respect to an eligible project, eligible aviation project or
eligible wind or solar energy project, as certified by the secretary, to the
special economic revitalization fund, which fund is hereby created in the
custody of the state treasurer but shall not be a part of the state general
fund. Distributions from the special economic revitalization fund shall be
used to pay principal and interest on the bonds as authorized pursuant to
this act and shall not be subject to appropriation. On or before the 1 0th day
of each month, the director of accounts and reports shall transfer from the
state general fund to the special economic revitalization fund interest
earnings based on: (1) The average daily balance of moneys in the special
economic revitalization fund for the preceding month; and (2) the net
earnings rate of the pooled money investment portfolio for the preceding
month. The provisions of this section shall expire when all principal and
interest on obligations issued for the purpose of financing all or a portion
of the costs of an eligible project, eligible aviation project or eligible wind
or solar energy project has been paid. Moneys credited to the special
economic revitalization fund in accordance with the foregoing provisions
shall be distributed to or on the order of the Kansas development finance
authority to pay principal and interest on bonds issued to finance an
eligible project, eligible aviation project or eligible wind or solar energy
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project. The state treasurer shall make such distributions on such dates as
mutually agreed to by the Kansas development finance authority, the
paying agent for such obligations and the state treasurer. The total of all
distributions under this section shall not exceed an amount determined to
be sufficient to pay the principal and interest on such bonds.
(i) The eligible business, eligible aviation business or eligible wind or
solar energy business shall not be allowed to participate in the IMPACT
act or program pursuant to K.S.A. 74-50,102 et seq., and amendments
thereto, with respect to the eligible project, eligible aviation project or
eligible wind or solar energy project. The secretary may include provisions
in the agreement described in subsection (e) to limit or reduce the amount
of eligible credits, including but not limited to those allowed pursuant to
K.S.A. 79-32,160a, or 79-32,182b or 79-32,206, and amendments thereto,
on the investment of the proceeds of the bonds issued under this act.
Nothing in this subsection shall be construed to prohibit the eligible
business, eligible aviation business or eligible wind or solar energy
business from receiving credits allowed by law for any investment not
related to bonds issued pursuant to this section.
(j) All hiring and use of the employees described in subsection (c)(5)
(C) by an eligible business in connection with an eligible project, or
described in subsection (c)(3)(C) by an eligible aviation business in
connection with an eligible aviation project or an eligible wind or solar
energy business, as described in subsection (c)(7), shall be subject to post
audit under the legislative post audit act, and amendments thereto. All
audit expenses incurred shall be charged to and paid by such eligible
business or eligible aviation business. All moneys received for such audit
expenses shall be deposited in the state treasury and credited to the audit
services fund of the division of post audit. The division of post audit is
hereby authorized to conduct the audit work authorized by this section in
accordance with the provisions of the legislative post audit act, and
amendments thereto.
(k) Bonds issued under this section shall not be used to provide for or
to increase compensation packages, rewards, bonuses, pensions, enhanced
retirement, stock options, buyouts or substantial severance pay or other
financial benefits to any chief executive officer, chief financial officer or
any officers of the company.
(l) The agreement described in subsection (e) shall include a
provision requiring the eligible business, eligible aviation business or
eligible wind or solar energy business to agree that:
(1) The eligible business, eligible aviation business or eligible wind
or solar energy business shall be subject to post audit under the legislative
post audit act, and amendments thereto,;
(2) the eligible business, eligible aviation business or eligible wind or
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solar energy business shall pay audit expenses; and
(3) the eligible business, eligible aviation business or eligible wind or
solar energy business shall not limit access to information required under
the legislative post audit act, and amendments thereto.
(m) The secretary shall report to the state finance council on any new
agreements entered into between the secretary and an eligible business,
eligible aviation business or eligible wind or solar energy business
pursuant to this section.
(n) No new eligible project, eligible aviation project or eligible wind
or solar energy project shall be approved for financing under the
provisions of this section on or after July 1, 2013.
Sec. 2. K.S.A. 74-8947 is hereby amended to read as follows: 74-
8947. (a) For the purpose of financing the construction of a new integrated
coal gasification power plant or expansion of an existing integrated coal
gasification power plant, the Kansas development finance authority is
hereby authorized to issue revenue bonds pursuant to the Kansas
development finance authority act, K.S.A. 74-8901 et seq., and
amendments thereto, in amounts sufficient to pay the costs of such
construction or expansion, including any required interest on the bonds
during construction and installation, plus all amounts required for the costs
of bond issuance, costs of credit enhancement or other financial contracts,
capitalized interest and any required reserves on the bonds. The bonds, and
interest thereon, issued pursuant to this section shall be payable from
revenues pledged to the Kansas development finance authority for such
purpose, which may include revenues derived from sales of generation
from the integrated coal gasification power plant.
(b) The provisions of subsection (a) of K.S.A. 74-8905 (a), and
amendments thereto, shall not prohibit the issuance of bonds by the
Kansas development finance authority for the purposes of this section and
any such issuance of bonds is exempt from the provisions of subsection (a)
of K.S.A. 74-8905 (a), and amendments thereto, which that would operate
to preclude such issuance.
(c) Revenue bonds, including refunding revenue bonds, issued under
this section shall not constitute an indebtedness of the state of Kansas, nor
shall they constitute indebtedness within the meaning of any constitutional
or statutory provision limiting the incurring of indebtedness.
(d) Revenue bonds, including refunding revenue bonds, issued
hereunder and the income derived therefrom are and shall be exempt from
all state, county and municipal taxation in the state of Kansas, except
Kansas estate taxes.
(e) As used in this section:
(1) "Expansion of an existing integrated coal gasification power
plant" means expansion, beginning after December 31, 2005, of the
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capacity of an existing integrated coal gasification power plant by at least
10% of such capacity, and includes construction or expansion of
transmission facilities which that are located at the site of such plant and
are employed specifically to serve such expansion.
(2) "Integrated coal gasification power plant" has the meaning
provided by K.S.A. 79-32,238, and amendments thereto means a facility
that: (A) Is located in Kansas; (B) converts coal into synthesis gas that
can be used as a fuel to generate energy; and (C) uses the synthesis gas as
a fuel to generate electric energy.
(3) "New integrated coal gasification power plant" means an
integrated coal gasification power plant construction of which begins after
December 31, 2005, and includes transmission facilities which that are
located at the site of such plant and are employed specifically to serve such
plant.
Sec. 3. K.S.A. 75-3712 is hereby amended to read as follows: 75-
3712. (a) The state emergency fund is hereby continued in the state
treasury for the use of the state finance council created by K.S.A. 75-3708,
and amendments thereto, for the purposes and within the limitations
prescribed by K.S.A. 75-3713, 75-3713a, 75-3713b, 75-3713c, 75-3713d ,
and 75-3714 and K.S.A. 75-3713e, and amendments thereto.
(b) (1) Upon certification by the director of the budget to the director
of accounts and reports that the unencumbered balance in the state
emergency fund is insufficient to pay an amount that is necessary to
finance an action approved by the state finance council pursuant to K.S.A.
75-3713, 75-3713a, 75-3713b, 75-3713c, or 75-3713d or K.S.A. 75-3713e,
and amendments thereto, the director of accounts and reports shall transfer
an amount equal to the insufficient amount from the state general fund to
the state emergency fund. The total of all amounts transferred from the
state general fund to the state emergency fund pursuant to this subsection
(b)(1) during any fiscal year shall not exceed $10,000,000, excluding all
amounts transferred from the state general fund pursuant to subsection (b)
(2).
(2) In addition to the provisions of subsection (b)(1), during the
period commencing on the effective date of this act May 31, 2007, until
January 14, 2008, notwithstanding the provisions of any other statute to
the contrary:
(A) The director of the budget shall : (i) Provide (i) notice to the state
finance council that the unencumbered balance in the state emergency fund
is insufficient to pay an amount that is necessary to finance an action
approved by the state finance council pursuant to K.S.A. 75-3713, 75-
3713a, or 75-3713b, or K.S.A. 75-3713e , and amendments thereto, which
that is directly related to a severe weather-related state of disaster
emergency declared by the governor pursuant to K.S.A. 48-924, and
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amendments thereto,; and (ii) the director of the budget shall include with
such notice the director's recommendations regarding a specific amount or
amounts, which that in the aggregate are equal to the insufficient amount,
and which that could be transferred to the state emergency fund for such
purpose from the state general fund or any special revenue fund or funds,
or any account or accounts of the state general fund or any such special
revenue fund or funds; and
(B) upon approval such recommendation or any modification thereof
by the state finance council, by unanimous vote of all of the members of
the council, acting on this matter which that is hereby characterized as a
matter of legislative delegation and subject to the guidelines prescribed in
subsection (c) of K.S.A. 75-3711c (c), and amendments thereto, the
director of the budget shall certify to the director of accounts and reports
such recommendation, including any modifications, as approved by the
state finance council; and
(C) upon receipt of such certification by the director of the budget,
the director of accounts and reports shall transfer the amount or amounts
specified in such certification from the state general fund or any special
revenue fund or funds, or any account or accounts of the state general fund
or any such special revenue fund or funds, to the state emergency fund,
except that the total of all amounts transferred to the state emergency fund
pursuant to this subsection (b)(2) during the period commencing on the
effective date of this act May 31, 2007, until January 14, 2008, shall not
exceed $25,000,000.
Sec. 4. K.S.A. 75-4275 is hereby amended to read as follows: 75-
4275. Any state bank, national banking association or production credit
association or agricultural credit association chartered by the farm credit
administration under the federal farm credit act, as amended (12 U.S.C. §
2001 et seq.), who claims a tax credit pursuant to K.S.A. 79-1126a or 79-
32,181a, and amendments thereto, shall not use any funds from an
agricultural production loan deposit, invested pursuant to K.S.A. 75-4268
through 75-4274, and amendments thereto, for agricultural production
loans to qualify for the tax credit pursuant to K.S.A. 79-1126a or 79-
32,181a, and amendments thereto.
Sec. 5. K.S.A. 79-225 is hereby amended to read as follows: 79-225.
(a) The following described property, to the extent herein specified, shall
be exempt from all property taxes levied under the laws of the state of
Kansas:
(1) Any new integrated coal gasification power plant property or any
expanded integrated coal gasification power plant property.
(2) All property purchased for or constructed or installed at an
integrated coal gasification power plant to comply with air emission
standards imposed by state or federal law.
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(b) The provisions of subsection (a) shall apply from and after
purchase or commencement of construction or installation of such property
and for the 12 taxable years immediately following the taxable year in
which construction or installation of such property is completed.
(c) The provisions of this section shall apply to all taxable years
commencing after December 31, 2005.
(d) As used in this section:
(1) "Expanded integrated coal gasification power plant property"
means any real or tangible personal property purchased, constructed or
installed for incorporation in and use as part of an expansion of an existing
integrated coal gasification power plant, construction of which expansion
begins after December 31, 2005.
(2) "Expansion of an existing integrated coal gasification power
plant" means expansion of the capacity of an existing integrated coal
gasification power plant by at least 10% of such capacity.
(3) "Integrated coal gasification power plant" has the meaning
provided by K.S.A. 79-32,238, and amendments thereto means a facility
that: (A) Is located in Kansas; (B) converts coal into synthesis gas that
can be used as a fuel to generate energy; and (C) uses the synthesis gas as
a fuel to generate electric energy.
(4) "New integrated coal gasification power plant property" means
any real or tangible personal property purchased, constructed or installed
for incorporation in and use as part of an integrated coal gasification
power plant, construction of which begins after December 31, 2005.
Sec. 6. K.S.A. 79-255 is hereby amended to read as follows: 79-255.
(a) For all taxable years commencing after December 31, 1999, and
subject to the provisions of this section, there shall be allowed as a
property tax refund to the operator of an oil lease an amount equal to 50%
of the total amount of property tax levied and actually and timely paid by
the operator for a property tax year which is attributable to the working
interest of an oil lease the average daily production per well from which is
15 barrels or less when the price per barrel of oil is $16 or less, as
prescribed in the oil and gas appraisal guide by the director of property
valuation for the applicable tax year. No refund shall be allowed for
property tax paid upon machinery and equipment for which a credit is
claimed pursuant to K.S.A. 79-32,206, and amendments thereto.
(b) No claim for a refund allowable pursuant to subsection (a) shall
be paid unless filed with and in possession of the department of revenue on
or before April 15 of the year next succeeding the year in which such taxes
were paid, except that the director of taxation may extend the time for
filing any claim or accept a claim filed after the deadline for filing when
good cause exists therefor if the claim has been filed within three years of
the deadline.
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(c) The allowable amount of such claim shall be paid to the operator
from the income tax refund fund upon warrants of the director of accounts
and reports pursuant to vouchers approved by the director of taxation or by
any person designated by the claimant, but no warrant issued hereunder
shall be drawn in an amount of less than $5. No interest shall be allowed
on any payment made to an operator pursuant to this section.
(d) Insofar as the same may be made applicable, the provisions of
K.S.A. 79-3226, and amendments thereto, shall apply to claims for refunds
allowable pursuant to this section which may become in dispute.
(e) The department of revenue shall devise and provide forms and
instructions necessary to administer this section, and the secretary of
revenue may adopt rules and regulations for such purpose.
Sec. 7. K.S.A. 2024 Supp. 79-32,117 is hereby amended to read as
follows: 79-32,117. (a) The Kansas adjusted gross income of an individual
means such individual's federal adjusted gross income for the taxable year,
with the modifications specified in this section.
(b) There shall be added to federal adjusted gross income:
(i) Interest income less any related expenses directly incurred in the
purchase of state or political subdivision obligations, to the extent that the
same is not included in federal adjusted gross income, on obligations of
any state or political subdivision thereof, but to the extent that interest
income on obligations of this state or a political subdivision thereof issued
prior to January 1, 1988, is specifically exempt from income tax under the
laws of this state authorizing the issuance of such obligations, it shall be
excluded from computation of Kansas adjusted gross income whether or
not included in federal adjusted gross income. Interest income on
obligations of this state or a political subdivision thereof issued after
December 31, 1987, shall be excluded from computation of Kansas
adjusted gross income whether or not included in federal adjusted gross
income.
(ii) Taxes on or measured by income or fees or payments in lieu of
income taxes imposed by this state or any other taxing jurisdiction to the
extent deductible in determining federal adjusted gross income and not
credited against federal income tax. This paragraph shall not apply to taxes
imposed under the provisions of K.S.A. 79-1107 or 79-1108, and
amendments thereto, for privilege tax year 1995, and all such years
thereafter.
(iii) The federal net operating loss deduction, except that the federal
net operating loss deduction shall not be added to an individual's federal
adjusted gross income for tax years beginning after December 31, 2016.
(iv) Federal income tax refunds received by the taxpayer if the
deduction of the taxes being refunded resulted in a tax benefit for Kansas
income tax purposes during a prior taxable year. Such refunds shall be
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included in income in the year actually received regardless of the method
of accounting used by the taxpayer. For purposes hereof, a tax benefit shall
be deemed to have resulted if the amount of the tax had been deducted in
determining income subject to a Kansas income tax for a prior year
regardless of the rate of taxation applied in such prior year to the Kansas
taxable income, but only that portion of the refund shall be included as
bears the same proportion to the total refund received as the federal taxes
deducted in the year to which such refund is attributable bears to the total
federal income taxes paid for such year. For purposes of the foregoing
sentence, federal taxes shall be considered to have been deducted only to
the extent such deduction does not reduce Kansas taxable income below
zero.
(v) The amount of any depreciation deduction or business expense
deduction claimed on the taxpayer's federal income tax return for any
capital expenditure in making any building or facility accessible to the
handicapped, for which expenditure the taxpayer claimed the credit
allowed by K.S.A. 79-32,177, and amendments thereto.
(vi) Any amount of designated employee contributions picked up by
an employer pursuant to K.S.A. 12-5005, 20-2603, 74-4919 and 74-4965,
and amendments thereto.
(vii) The amount of any charitable contribution made to the extent the
same is claimed as the basis for the credit allowed pursuant to K.S.A. 79-
32,196, and amendments thereto.
(viii) The amount of any costs incurred for improvements to a swine
facility, claimed for deduction in determining federal adjusted gross
income, to the extent the same is claimed as the basis for any credit
allowed pursuant to K.S.A. 79-32,204, and amendments thereto.
(ix) The amount of any ad valorem taxes and assessments paid and
the amount of any costs incurred for habitat management or construction
and maintenance of improvements on real property, claimed for deduction
in determining federal adjusted gross income, to the extent the same is
claimed as the basis for any credit allowed pursuant to K.S.A. 79-32,203,
and amendments thereto. The provisions of this paragraph shall expire
and have no effect on and after July 1, 2025.
(x) Amounts received as nonqualified withdrawals, as defined by
K.S.A. 75-643, and amendments thereto, if, at the time of contribution to a
family postsecondary education savings account, such amounts were
subtracted from the federal adjusted gross income pursuant to subsection
(c)(xv) or if such amounts are not already included in the federal adjusted
gross income.
(xi) The amount of any contribution made to the same extent the
same is claimed as the basis for the credit allowed pursuant to K.S.A. 74-
50,154, and amendments thereto.
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(xii) For taxable years commencing after December 31, 2004,
amounts received as withdrawals not in accordance with the provisions of
K.S.A. 74-50,204, and amendments thereto, if, at the time of contribution
to an individual development account, such amounts were subtracted from
the federal adjusted gross income pursuant to subsection (c)(xiii), or if
such amounts are not already included in the federal adjusted gross
income.
(xiii) The amount of any expenditures claimed for deduction in
determining federal adjusted gross income, to the extent the same is
claimed as the basis for any credit allowed pursuant to K.S.A. 79-32,217
through 79-32,220 or 79-32,222, and amendments thereto.
(xiv) The amount of any amortization deduction claimed in
determining federal adjusted gross income to the extent the same is
claimed for deduction pursuant to K.S.A. 79-32,221, and amendments
thereto.
(xv) The amount of any expenditures claimed for deduction in
determining federal adjusted gross income, to the extent the same is
claimed as the basis for any credit allowed pursuant to K.S.A. 79-32,223
through 79-32,226, 79-32,228 through 79-32,231, 79-32,233 through 79-
32,236, 79-32,238 through 79-32,241, 79-32,245 through 79-32,248 or 79-
32,251 through 79-32,254, and amendments thereto.
(xvi) The amount of any amortization deduction claimed in
determining federal adjusted gross income to the extent the same is
claimed for deduction pursuant to K.S.A. 79-32,227, 79-32,232, 79-
32,237, 79-32,249, 79-32,250 or 79-32,255, and amendments thereto.
(xvii) The amount of any amortization deduction claimed in
determining federal adjusted gross income to the extent the same is
claimed for deduction pursuant to K.S.A. 79-32,256, and amendments
thereto.
(xviii) For taxable years commencing after December 31, 2006, the
amount of any ad valorem or property taxes and assessments paid to a state
other than Kansas or local government located in a state other than Kansas
by a taxpayer who resides in a state other than Kansas, when the law of
such state does not allow a resident of Kansas who earns income in such
other state to claim a deduction for ad valorem or property taxes or
assessments paid to a political subdivision of the state of Kansas in
determining taxable income for income tax purposes in such other state, to
the extent that such taxes and assessments are claimed as an itemized
deduction for federal income tax purposes.
(xix) For taxable years beginning after December 31, 2012, and
ending before January 1, 2017, the amount of any: (1) Loss from business
as determined under the federal internal revenue code and reported from
schedule C and on line 12 of the taxpayer's form 1040 federal individual
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income tax return; (2) loss from rental real estate, royalties, partnerships, S
corporations, except those with wholly owned subsidiaries subject to the
Kansas privilege tax, estates, trusts, residual interest in real estate
mortgage investment conduits and net farm rental as determined under the
federal internal revenue code and reported from schedule E and on line 17
of the taxpayer's form 1040 federal individual income tax return; and (3)
farm loss as determined under the federal internal revenue code and
reported from schedule F and on line 18 of the taxpayer's form 1040
federal income tax return; all to the extent deducted or subtracted in
determining the taxpayer's federal adjusted gross income. For purposes of
this subsection, references to the federal form 1040 and federal schedule
C, schedule E, and schedule F, shall be to such form and schedules as they
existed for tax year 2011, and as revised thereafter by the internal revenue
service.
(xx) For taxable years beginning after December 31, 2012, and
ending before January 1, 2017, the amount of any deduction for self-
employment taxes under section 164(f) of the federal internal revenue
code as in effect on January 1, 2012, and amendments thereto, in
determining the federal adjusted gross income of an individual taxpayer, to
the extent the deduction is attributable to income reported on schedule C,
E or F and on line 12, 17 or 18 of the taxpayer's form 1040 federal income
tax return.
(xxi) For taxable years beginning after December 31, 2012, and
ending before January 1, 2017, the amount of any deduction for pension,
profit sharing, and annuity plans of self-employed individuals under
section 62(a)(6) of the federal internal revenue code as in effect on January
1, 2012, and amendments thereto, in determining the federal adjusted gross
income of an individual taxpayer.
(xxii) For taxable years beginning after December 31, 2012, and
ending before January 1, 2017, the amount of any deduction for health
insurance under section 162(l) of the federal internal revenue code as in
effect on January 1, 2012, and amendments thereto, in determining the
federal adjusted gross income of an individual taxpayer.
(xxiii) For taxable years beginning after December 31, 2012, and
ending before January 1, 2017, the amount of any deduction for domestic
production activities under section 199 of the federal internal revenue code
as in effect on January 1, 2012, and amendments thereto, in determining
the federal adjusted gross income of an individual taxpayer.
(xxiv) For taxable years commencing after December 31, 2013, that
portion of the amount of any expenditure deduction claimed in
determining federal adjusted gross income for expenses paid for medical
care of the taxpayer or the taxpayer's spouse or dependents when such
expenses were paid or incurred for an abortion, or for a health benefit plan,
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as defined in K.S.A. 65-6731, and amendments thereto, for the purchase of
an optional rider for coverage of abortion in accordance with K.S.A. 40-
2,190, and amendments thereto, to the extent that such taxes and
assessments are claimed as an itemized deduction for federal income tax
purposes.
(xxv) For taxable years commencing after December 31, 2013, that
portion of the amount of any expenditure deduction claimed in
determining federal adjusted gross income for expenses paid by a taxpayer
for health care when such expenses were paid or incurred for abortion
coverage, a health benefit plan, as defined in K.S.A. 65-6731, and
amendments thereto, when such expenses were paid or incurred for
abortion coverage or amounts contributed to health savings accounts for
such taxpayer's employees for the purchase of an optional rider for
coverage of abortion in accordance with K.S.A. 40-2,190, and
amendments thereto, to the extent that such taxes and assessments are
claimed as a deduction for federal income tax purposes.
(xxvi) For all taxable years beginning after December 31, 2016, the
amount of any charitable contribution made to the extent the same is
claimed as the basis for the credit allowed pursuant to K.S.A. 72-4357, and
amendments thereto, and is also claimed as an itemized deduction for
federal income tax purposes.
(xxvii) For all taxable years commencing after December 31, 2020,
the amount of any interest expense paid or accrued in a previous taxable
year but allowed as a deduction pursuant to section 163 of the federal
internal revenue code in the current taxable year by reason of the
carryforward of disallowed business interest pursuant to section 163(j) of
the federal internal revenue code. For purposes of this paragraph, an
interest expense is considered paid or accrued only in the first taxable year
the deduction would have been allowable pursuant to section 163 of the
federal internal revenue code if the limitation pursuant to section 163(j) of
the federal internal revenue code did not exist.
(xxviii) For all taxable years beginning after December 31, 2021, the
amount of any contributions to, or earnings from, a first-time home buyer
savings account if distributions from the account were not used to pay for
expenses or transactions authorized pursuant to K.S.A. 2024 Supp. 58-
4904, and amendments thereto, or were not held for the minimum length
of time required pursuant to K.S.A. 2024 Supp. 58-4904, and amendments
thereto. Contributions to, or earnings from, such account shall also include
any amount resulting from the account holder not designating a surviving
payable on death beneficiary pursuant to K.S.A. 2024 Supp. 58-4904(e),
and amendments thereto.
(xxix) For all taxable years beginning after December 31, 2024, the
amount of any contributions to, or earnings from, an adoption savings
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account if distributions from the account were not used to pay for expenses
or transactions authorized pursuant to K.S.A. 2024 Supp. 38-2504 , and
amendments thereto, or were not held for the minimum length of time
required pursuant to K.S.A. 2024 Supp. 38-2504, and amendments thereto.
Contributions to, or earnings from, such account shall also include any
amount resulting from the account holder not designating a surviving
payable on death beneficiary pursuant to K.S.A. 2024 Supp. 38-2504(e) ,
and amendments thereto.
(c) There shall be subtracted from federal adjusted gross income:
(i) Interest or dividend income on obligations or securities of any
authority, commission or instrumentality of the United States and its
possessions less any related expenses directly incurred in the purchase of
such obligations or securities, to the extent included in federal adjusted
gross income but exempt from state income taxes under the laws of the
United States.
(ii) Any amounts received which are included in federal adjusted
gross income but which are specifically exempt from Kansas income
taxation under the laws of the state of Kansas.
(iii) The portion of any gain or loss from the sale or other disposition
of property having a higher adjusted basis for Kansas income tax purposes
than for federal income tax purposes on the date such property was sold or
disposed of in a transaction in which gain or loss was recognized for
purposes of federal income tax that does not exceed such difference in
basis, but if a gain is considered a long-term capital gain for federal
income tax purposes, the modification shall be limited to that portion of
such gain which is included in federal adjusted gross income.
(iv) The amount necessary to prevent the taxation under this act of
any annuity or other amount of income or gain which was properly
included in income or gain and was taxed under the laws of this state for a
taxable year prior to the effective date of this act, as amended, to the
taxpayer, or to a decedent by reason of whose death the taxpayer acquired
the right to receive the income or gain, or to a trust or estate from which
the taxpayer received the income or gain.
(v) The amount of any refund or credit for overpayment of taxes on
or measured by income or fees or payments in lieu of income taxes
imposed by this state, or any taxing jurisdiction, to the extent included in
gross income for federal income tax purposes.
(vi) Accumulation distributions received by a taxpayer as a
beneficiary of a trust to the extent that the same are included in federal
adjusted gross income.
(vii) Amounts received as annuities under the federal civil service
retirement system from the civil service retirement and disability fund and
other amounts received as retirement benefits in whatever form which
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were earned for being employed by the federal government or for service
in the armed forces of the United States.
(viii) Amounts received by retired railroad employees as a
supplemental annuity under the provisions of 45 U.S.C. §§ 228b(a) and
228c(a)(1) et seq.
(ix) Amounts received by retired employees of a city and by retired
employees of any board of such city as retirement allowances pursuant to
K.S.A. 13-14,106, and amendments thereto, or pursuant to any charter
ordinance exempting a city from the provisions of K.S.A. 13-14,106, and
amendments thereto.
(x) (1) For taxable years beginning after December 31, 2021, the
amount of any federal credit disallowance under the provisions of 26
U.S.C. § 280C(a).
(2) For taxable years beginning after December 31, 2019, and ending
before January 1, 2022, 50% of the amount of the federal employee
retention credit disallowance under rules similar to the rules of 26 U.S.C. §
280C(a). The taxpayer shall be required to prove that such taxpayer
previously filed Kansas income tax returns and paid Kansas income tax on
the disallowed amount. Notwithstanding any other provision of law to the
contrary, any claim for refund or amended return relating to this
subparagraph shall be allowed to be filed on or before April 15, 2025, and
no claim for refund or amended return shall be allowed or filed after April
15, 2025.
(xi) For taxable years beginning after December 31, 1986, dividend
income on stock issued by Kansas venture capital, inc.
(xii) For taxable years beginning after December 31, 1989, amounts
received by retired employees of a board of public utilities as pension and
retirement benefits pursuant to K.S.A. 13-1246, 13-1246a and 13-1249,
and amendments thereto.
(xiii) For taxable years beginning after December 31, 2004, amounts
contributed to and the amount of income earned on contributions deposited
to an individual development account under K.S.A. 74-50,201 et seq., and
amendments thereto.
(xiv) For all taxable years commencing after December 31, 1996, that
portion of any income of a bank organized under the laws of this state or
any other state, a national banking association organized under the laws of
the United States, an association organized under the savings and loan
code of this state or any other state, or a federal savings association
organized under the laws of the United States, for which an election as an
S corporation under subchapter S of the federal internal revenue code is in
effect, which accrues to the taxpayer who is a stockholder of such
corporation and which is not distributed to the stockholders as dividends of
the corporation. For taxable years beginning after December 31, 2012, and
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ending before January 1, 2017, the amount of modification under this
subsection shall exclude the portion of income or loss reported on schedule
E and included on line 17 of the taxpayer's form 1040 federal individual
income tax return.
(xv) The cumulative amounts not exceeding $3,000, or $6,000 for a
married couple filing a joint return, for each designated beneficiary that
are contributed to: (1) A family postsecondary education savings account
established under the Kansas postsecondary education savings program or
a qualified tuition program established and maintained by another state or
agency or instrumentality thereof pursuant to section 529 of the internal
revenue code of 1986, as amended, for the purpose of paying the qualified
higher education expenses of a designated beneficiary; or (2) an achieving
a better life experience (ABLE) account established under the Kansas
ABLE savings program or a qualified ABLE program established and
maintained by another state or agency or instrumentality thereof pursuant
to section 529A of the internal revenue code of 1986, as amended, for the
purpose of saving private funds to support an individual with a disability.
The terms and phrases used in this paragraph shall have the meaning
respectively ascribed thereto by the provisions of K.S.A. 75-643 and 75-
652, and amendments thereto, and the provisions of such sections are
hereby incorporated by reference for all purposes thereof. For all taxable
years beginning after December 31, 2022, contributions made to a
qualified tuition program account or a qualified ABLE program account
pursuant to this paragraph on and after January 1 but prior to the date
required for filing a return pursuant to K.S.A. 79-3221, and amendments
thereto, of the successive taxable year may be elected by the taxpayer to
apply to the prior taxable year if such election is made at the time of filing
the return. No contribution shall be used as a modification pursuant to this
paragraph in more than one taxable year.
(xvi) For all taxable years beginning after December 31, 2004,
amounts received by taxpayers who are or were members of the armed
forces of the United States, including service in the Kansas army and air
national guard, as a recruitment, sign up or retention bonus received by
such taxpayer as an incentive to join, enlist or remain in the armed services
of the United States, including service in the Kansas army and air national
guard, and amounts received for repayment of educational or student loans
incurred by or obligated to such taxpayer and received by such taxpayer as
a result of such taxpayer's service in the armed forces of the United States,
including service in the Kansas army and air national guard.
(xvii) For all taxable years beginning after December 31, 2004,
amounts received by taxpayers who are eligible members of the Kansas
army and air national guard as a reimbursement pursuant to K.S.A. 48-
281, and amendments thereto, and amounts received for death benefits
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pursuant to K.S.A. 48-282, and amendments thereto, to the extent that
such death benefits are included in federal adjusted gross income of the
taxpayer.
(xviii) (A) For all taxable years beginning after December 31, 2007,
and ending before January 1, 2024, amounts received as benefits under the
federal social security act which are included in federal adjusted gross
income of a taxpayer with federal adjusted gross income of $75,000 or
less, whether such taxpayer's filing status is single, head of household,
married filing separate or married filing jointly.
(B) For all taxable years beginning after December 31, 2023, amounts
received as benefits under the federal social security act that are included
in federal adjusted gross income of a taxpayer.
(xix) Amounts received by retired employees of Washburn university
as retirement and pension benefits under the university's retirement plan.
(xx) For taxable years beginning after December 31, 2012, and
ending before January 1, 2017, the amount of any: (1) Net profit from
business as determined under the federal internal revenue code and
reported from schedule C and on line 12 of the taxpayer's form 1040
federal individual income tax return; (2) net income, not including
guaranteed payments as defined in section 707(c) of the federal internal
revenue code and as reported to the taxpayer from federal schedule K-1,
(form 1065-B), in box 9, code F or as reported to the taxpayer from federal
schedule K-1, (form 1065) in box 4, from rental real estate, royalties,
partnerships, S corporations, estates, trusts, residual interest in real estate
mortgage investment conduits and net farm rental as determined under the
federal internal revenue code and reported from schedule E and on line 17
of the taxpayer's form 1040 federal individual income tax return; and (3)
net farm profit as determined under the federal internal revenue code and
reported from schedule F and on line 18 of the taxpayer's form 1040
federal income tax return; all to the extent included in the taxpayer's
federal adjusted gross income. For purposes of this subsection, references
to the federal form 1040 and federal schedule C, schedule E, and schedule
F, shall be to such form and schedules as they existed for tax year 2011
and as revised thereafter by the internal revenue service.
(xxi) For all taxable years beginning after December 31, 2013,
amounts equal to the unreimbursed travel, lodging and medical
expenditures directly incurred by a taxpayer while living, or a dependent
of the taxpayer while living, for the donation of one or more human organs
of the taxpayer, or a dependent of the taxpayer, to another person for
human organ transplantation. The expenses may be claimed as a
subtraction modification provided for in this section to the extent the
expenses are not already subtracted from the taxpayer's federal adjusted
gross income. In no circumstances shall the subtraction modification
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provided for in this section for any individual, or a dependent, exceed
$5,000. As used in this section, "human organ" means all or part of a liver,
pancreas, kidney, intestine, lung or bone marrow. The provisions of this
paragraph shall take effect on the day the secretary of revenue certifies to
the director of the budget that the cost for the department of revenue of
modifications to the automated tax system for the purpose of
implementing this paragraph will not exceed $20,000.
(xxii) For taxable years beginning after December 31, 2012, and
ending before January 1, 2017, the amount of net gain from the sale of: (1)
Cattle and horses, regardless of age, held by the taxpayer for draft,
breeding, dairy or sporting purposes, and held by such taxpayer for 24
months or more from the date of acquisition; and (2) other livestock,
regardless of age, held by the taxpayer for draft, breeding, dairy or
sporting purposes, and held by such taxpayer for 12 months or more from
the date of acquisition. The subtraction from federal adjusted gross income
shall be limited to the amount of the additions recognized under the
provisions of subsection (b)(xix) attributable to the business in which the
livestock sold had been used. As used in this paragraph, the term
"livestock" shall not include poultry.
(xxiii) For all taxable years beginning after December 31, 2012,
amounts received under either the Overland Park, Kansas police
department retirement plan or the Overland Park, Kansas fire department
retirement plan, both as established by the city of Overland Park, pursuant
to the city's home rule authority.
(xxiv) For taxable years beginning after December 31, 2013, and
ending before January 1, 2017, the net gain from the sale from Christmas
trees grown in Kansas and held by the taxpayer for six years or more.
(xxv) For all taxable years commencing after December 31, 2020,
100% of global intangible low-taxed income under section 951A of the
federal internal revenue code of 1986, before any deductions allowed
under section 250(a)(1)(B) of such code.
(xxvi) (1) For all taxable years commencing after December 31,
2020, the amount of any interest expense paid or accrued in the current
taxable year and disallowed as a deduction pursuant to section 163(j) of
the federal internal revenue code.
(2) For purposes of this paragraph, an interest expense is considered
paid or accrued only in the first taxable year the deduction would have
been allowable pursuant to section 163 of the federal internal revenue code
if the limitation pursuant to section 163(j) of the federal internal revenue
code did not exist.
(3) For tax year 2021, an amount equal to the sum of any interest
expenses paid or accrued in tax years 2018, 2019 and 2020 less the sum of
amounts allowed as a deduction pursuant to section 163 of the federal
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internal revenue code in tax years 2018, 2019 and 2020.
(xxvii) For taxable years commencing after December 31, 2020, the
amount disallowed as a deduction pursuant to section 274 of the federal
internal revenue code of 1986 for meal expenditures shall be allowed to
the extent such expense was deductible for determining federal income tax
and was allowed and in effect on December 31, 2017.
(xxviii) For all taxable years beginning after December 31, 2021: (1)
The amount contributed to a first-time home buyer savings account
pursuant to K.S.A. 2024 Supp. 58-4903, and amendments thereto, in an
amount not to exceed $3,000 for an individual or $6,000 for a married
couple filing a joint return; or (2) amounts received as income earned from
assets in a first-time home buyer savings account. For all taxable years
beginning after December 31, 2022, contributions made to a first-time
home buyer savings account pursuant to subparagraph (1) on and after
January 1 but prior to the date required for filing a return pursuant to
K.S.A. 79-3221, and amendments thereto, of the successive taxable year
may be elected by the taxpayer to apply to the prior taxable year if such
election is made at the time of filing the return. No contribution shall be
used as a modification pursuant to subparagraph (1) in more than one
taxable year.
(xxix) For taxable years beginning after December 31, 2017, for an
individual taxpayer who carried back federal net operating losses arising in
a taxable year beginning after December 31, 2017, and before January 1,
2021, pursuant to section 172(b)(1) of the federal internal revenue code as
amended by the coronavirus aid, relief, and economic security act
(CARES act), the amount of such federal net operating loss carryback for
each applicable year. If the amount of such federal net operating loss
carryback exceeds the taxpayer's Kansas adjusted gross income for such
taxable year, the amount thereof that exceeds such Kansas adjusted gross
income may be carried forward as a subtraction modification in the
following taxable year or years until the total amount of such federal net
operating loss carryback has been deducted, except that no such unused
amount shall be carried forward for deduction as a subtraction
modification after the 20 th taxable year following the taxable year of the
net operating loss. Notwithstanding any other provision of law to the
contrary, an extension of time shall be allowed for a claim for refund or
amended return for tax years 2018, 2019 or 2020 limited to the application
of the provisions of this paragraph and such claim for refund or amended
return must be filed on or before April 15, 2025.
(xxx) For all taxable years beginning after December 31, 2024: (1)
The amount contributed to an adoption savings account pursuant to K.S.A.
2024 Supp. 38-2503, and amendments thereto, in an amount not to exceed
$6,000 for an individual or $12,000 for a married couple filing a joint
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return; or (2) amounts received as income earned from assets in an
adoption savings account.
(d) There shall be added to or subtracted from federal adjusted gross
income the taxpayer's share, as beneficiary of an estate or trust, of the
Kansas fiduciary adjustment determined under K.S.A. 79-32,135, and
amendments thereto.
(e) The amount of modifications required to be made under this
section by a partner which relates to items of income, gain, loss, deduction
or credit of a partnership shall be determined under K.S.A. 79-32,131, and
amendments thereto, to the extent that such items affect federal adjusted
gross income of the partner.
Sec. 8. K.S.A. 79-32,140a is hereby amended to read as follows: 79-
32,140a. (a) Whenever, as a result of the provisions of K.S.A. 79-32,138 or
79-32,140, and amendments thereto, an assessment of additional income
tax is required to be made, no interest or penalties shall begin to accrue
upon such assessment until July 1, 1984.
(b) Whenever, as a result of the provisions of K.S.A. 79-32,138 or 79-
32,140, and amendments thereto, an overpayment of income tax was
incurred, interest shall not accrue on such overpayment until 90 days after
the date of receipt of the taxpayer's claim of overpayment of tax.
Sec. 9. K.S.A. 2024 Supp. 79-32,143a is hereby amended to read as
follows: 79-32,143a. (a) For taxable years beginning after December 31,
2020, a taxpayer may elect to take an expense deduction from Kansas net
income before expensing or recapture allocated or apportioned to this state
for the cost of the following property placed in service in this state during
the taxable year: (1) Tangible property eligible for depreciation under the
modified accelerated cost recovery system in section 168 of the internal
revenue code, as amended, but not including residential rental property,
nonresidential real property, any railroad grading or tunnel bore or any
other property with an applicable recovery period in excess of 25 years as
defined under section 168(c) or (g) of the internal revenue code, as
amended; and (2) computer software as defined in section 197(e)(3)(B) of
the internal revenue code, as amended, and as described in section 197(e)
(3)(A)(i) of the internal revenue code, as amended, to which section 167 of
the internal revenue code, as amended, applies. If such election is made,
the amount of expense deduction for such cost shall equal the difference
between the depreciable cost of such property for federal income tax
purposes and the sum of the amount of bonus depreciation being claimed
for such property pursuant to section 168(k) and the amount of expensing
deduction being claimed for such property pursuant to section 179 of the
internal revenue code, as amended, for federal income tax purposes in such
tax year, multiplied by the applicable factor, determined by using, the table
provided in subsection (f), based on the method of depreciation selected
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pursuant to section 168(b)(1), (2), or (3) or (g) of the internal revenue
code, as amended, and the applicable recovery period for such property as
defined under section 168(c) or (g) of the internal revenue code, as
amended. This election shall be made by the due date of the original
return, including any extensions, and may be made only for the taxable
year in which the property is placed in service, and once made, shall be
irrevocable.
(b) If the amount of expense deduction calculated pursuant to
subsection (a) exceeds the taxpayer's Kansas net income before expensing
or recapture allocated or apportioned to this state, such excess amount
shall be treated as a Kansas net operating loss as provided in K.S.A. 79-
32,143, and amendments thereto.
(c) If the property for which an expense deduction is taken pursuant
to subsection (a) is subsequently sold during the applicable recovery
period for such property as defined under section 168(c) of the internal
revenue code, as amended, and in a manner that would cause recapture of
any previously taken expense or depreciation deductions for federal
income tax purposes, or if the situs of such property is otherwise changed
such that the property is relocated outside the state of Kansas during such
applicable recovery period, then the expense deduction determined
pursuant to subsection (a) shall be subject to recapture and treated as
Kansas taxable income allocated to this state. The amount of recapture
shall be the Kansas expense deduction determined pursuant to subsection
(a) multiplied by a fraction, the numerator of which is the number of years
remaining in the applicable recovery period for such property as defined
under section 168(c) or (g) of the internal revenue code, as amended, after
such property is sold or removed from the state including the year of such
disposition, and the denominator of which is the total number of years in
such applicable recovery period.
(d) The situs of tangible property for purposes of claiming and
recapture of the expense deduction shall be the physical location of such
property. If such property is mobile, the situs shall be the physical location
of the business operations from where such property is used or based. The
situs of computer software shall be apportioned to Kansas based on the
fraction, the numerator of which is the number of the taxpayer's users
located in Kansas of licenses for such computer software used in the active
conduct of the taxpayer's business operations, and the denominator of
which is the total number of the taxpayer's users of the licenses for such
computer software used in the active conduct of the taxpayer's business
operations everywhere.
(e) Any member of a unitary group filing a combined report may
elect to take an expense deduction pursuant to subsection (a) for an
investment in property made by any member of the combined group,
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provided that the amount calculated pursuant to subsection (a) may only be
deducted from the Kansas net income before expensing or recapture
allocated to or apportioned to this state by such member making the
election.
(f) The following table shall be used in determining the expense
deduction calculated pursuant to subsection (a):
Factors
IRC§168 IRC§168(b)(1) IRC§168(b)(2) IRC§168(b)(3) or (g)
Recover Period Depreciation Depreciation Depreciation
(year) Method Method Method
2.5 * .077 .092
3 .075 .091 .106
3.5 * .102 .116
4 * .114 .129
5 .116 .135 .150
6 * .154 .170
6.5 * .163 .179
7 .151 .173 .190
7.5 * .181 .199
8 * .191 .208
8.5 * .199 .217
9 * .208 .226
9.5 * .216 .235
10 .198 .224 .244
10.5 * .232 .252
11 * .240 .261
11.5 * .248 .269
12 * .256 .277
12.5 * .263 .285
13 * .271 .293
13.5 * .278 .300
14 * .285 .308
15 * .299 .323
16 * .313 .337
16.5 * .319 .344
17 * .326 .351
18 * .339 .365
19 * .351 .378
20 * .363 .391
22 * .386 .415
24 * .408 .438
25 * .419 .449
*Not Applicable
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(g) If a taxpayer elects to expense any investment pursuant to
subsection (a), such taxpayer shall not be eligible for any tax credit,
accelerated depreciation, or deduction for such investment allowed
pursuant to K.S.A. 79-32,160a(e), 79-32,182b, 79-32,201, 79-32,204, 79-
32,211, 79-32,218, 79-32,221, 79-32,222, 79-32,224, 79-32,227, 79-
32,229, 79-32,232, 79-32,234, 79-32,237 , 79-32,239 , 79-32,246, 79-
32,249, 79-32,252, 79-32,255 , and 79-32,256 and 79-32,258 , and
amendments thereto.
(h) (1) For tax year 2013, the deduction allowed by this section shall
only be available to taxpayers subject to the income tax on corporations
imposed pursuant to K.S.A. 79-32,110(c), and amendments thereto, and
used only to determine such taxpayer's corporate income tax liability.
(2) For tax years 2014 through 2020, the deduction allowed by this
section shall only be available to taxpayers subject to the income tax on
corporations imposed pursuant to K.S.A. 79-32,110(c), and amendments
thereto, or the privilege tax imposed upon any national banking
association, state bank, savings bank, trust company or savings and loan
association pursuant to article 11 of chapter 79 of the Kansas Statutes
Annotated, and amendments thereto, and used only to determine such
taxpayer's corporate income or privilege tax liability.
(i) For tax year 2021, and all tax years thereafter, the deduction
allowed by this section shall be available to all taxpayers subject to the
income tax imposed pursuant to K.S.A. 79-32,110, and amendments
thereto, or the privilege tax imposed upon any national banking
association, state bank, savings bank, trust company or savings and loan
association pursuant to article 11 of chapter 79 of the Kansas Statutes
Annotated, and amendments thereto, and used only to determine such
taxpayer's income or privilege tax liability.
Sec. 10. K.S.A. 2024 Supp. 79-32,160a is hereby amended to read as
follows: 79-32,160a. (a) For taxable years commencing after December
31, 1999, and before January 1, 2012, any taxpayer who shall invest in a
qualified business facility, as defined in K.S.A. 79-32,154(b), and
amendments thereto, and effective for tax years commencing after
December 31, 2010, and before January 1, 2012, located in an area other
than a metropolitan county as defined in either K.S.A. 74-50,114 or 74-
50,211, and amendments thereto, and also meets the definition of a
business in K.S.A. 74-50,114(b), and amendments thereto, shall be
allowed a credit for such investment, in an amount determined under
subsection (b) or (c), as the case requires, against the tax imposed by the
Kansas income tax act or where the qualified business facility is the
principal place from which the trade or business of the taxpayer is directed
or managed and the facility has facilitated the creation of at least 20 new
full-time positions, against the premium tax or privilege fees imposed
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pursuant to K.S.A. 40-252, and amendments thereto, or as measured by the
net income of financial institutions imposed pursuant to article 11 of
chapter 79 of the Kansas Statutes Annotated, and amendments thereto, for
the taxable year during which commencement of commercial operations,
as defined in K.S.A. 79-32,154(f), and amendments thereto, occurs at such
qualified business facility. In the case of a taxpayer who meets the
definition of a manufacturing business in K.S.A. 74-50,114(d), and
amendments thereto, no credit shall be allowed under this section unless
the number of qualified business facility employees, as determined under
K.S.A. 79-32,154(d), and amendments thereto, engaged or maintained in
employment at the qualified business facility as a direct result of the
investment by the taxpayer for the taxable year for which the credit is
claimed equals or exceeds two. In the case of a taxpayer who meets the
definition of a nonmanufacturing business in K.S.A. 74-50,114(f), and
amendments thereto, no credit shall be allowed under this section unless
the number of qualified business facility employees, as determined under
K.S.A. 79-32,154(d), and amendments thereto, engaged or maintained in
employment at the qualified business facility as a direct result of the
investment by the taxpayer for the taxable year for which the credit is
claimed equals or exceeds five. Where an employee performs services for
the taxpayer outside the qualified business facility, the employee shall be
considered engaged or maintained in employment at the qualified business
facility if: (1) The employee's service performed outside the qualified
business facility is incidental to the employee's service inside the qualified
business facility; or (2) the base of operations or, the place from which the
service is directed or controlled, is at the qualified business facility.
(b) The credit allowed by subsection (a) for any taxpayer who invests
in a qualified business facility that is located in a designated
nonmetropolitan region established under K.S.A. 74-50,116, and
amendments thereto, on or after the effective date of this act, shall be a
portion of the income tax imposed by the Kansas income tax act on the
taxpayer's Kansas taxable income, the premium tax or privilege fees
imposed pursuant to K.S.A. 40-252, and amendments thereto, or the
privilege tax as measured by the net income of financial institutions
imposed pursuant to article 11 of chapter 79 of the Kansas Statutes
Annotated, and amendments thereto, for the taxable year for which such
credit is allowed, but in the case where the qualified business facility
investment was made prior to January 1, 1996, not in excess of 50% of
such tax. Such portion shall be an amount equal to the sum of the
following:
(1) $2,500 for each qualified business facility employee determined
under K.S.A. 79-32,154, and amendments thereto; plus
(2) $1,000 for each $100,000, or major fraction thereof, which shall
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be deemed to be 51% or more, in qualified business facility investment, as
determined under K.S.A. 79-32,154, and amendments thereto.
(c) The credit allowed by subsection (a) for any taxpayer who invests
in a qualified business facility that is not located in a nonmetropolitan
region established under K.S.A. 74-50,116, and amendments thereto, and
effective for tax years commencing after December 31, 2010, and before
January 1, 2012, located in an area other than a metropolitan county as
defined in either K.S.A. 74-50,114 or 74-50,211, and amendments thereto,
and that also meets the definition of business in K.S.A. 74-50,114(b), and
amendments thereto, on or after the effective date of this act, shall be a
portion of the income tax imposed by the Kansas income tax act on the
taxpayer's Kansas taxable income, the premium tax or privilege fees
imposed pursuant to K.S.A. 40-252, and amendments thereto, or the
privilege tax as measured by the net income of financial institutions
imposed pursuant to article 11 of chapter 79 of the Kansas Statutes
Annotated, and amendments thereto, for the taxable year for which such
credit is allowed, but in the case where the qualified business facility
investment was made prior to January 1, 1996, not in excess of 50% of
such tax. Such portion shall be an amount equal to the sum of the
following:
(1) $1,500 for each qualified business facility employee as
determined under K.S.A. 79-32,154, and amendments thereto; and
(2) $1,000 for each $100,000, or major fraction thereof, which shall
be deemed to be 51% or more, in qualified business facility investment as
determined under K.S.A. 79-32,154, and amendments thereto.
(d) The credit allowed by subsection (a) for each qualified business
facility employee and for qualified business facility investment shall be a
one-time credit. If the amount of the credit allowed under subsection (a)
exceeds the tax imposed by the Kansas income tax act on the taxpayer's
Kansas taxable income, the premium tax and privilege fees imposed
pursuant to K.S.A. 40-252, and amendments thereto, or the privilege tax as
measured by the net income of financial institutions imposed pursuant to
article 11 of chapter 79 of the Kansas Statutes Annotated, and amendments
thereto, for the taxable year, or in the case where the qualified business
facility investment was made prior to January 1, 1996, 50% of such tax
imposed upon the amount which exceeds such tax liability or such portion
thereof may be carried over for credit in the same manner in the
succeeding taxable years until the total amount of such credit is used.
Except that, before the credit is allowed, a taxpayer, who meets the
definition of a manufacturing business in K.S.A. 74-50,114(d), and
amendments thereto, shall recertify annually that the net increase of a
minimum of two qualified business facility employees has continued to be
maintained and a taxpayer, who meets the definition of a
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nonmanufacturing business in K.S.A. 74-50,114(f), and amendments
thereto, shall recertify annually that the net increase of a minimum of five
qualified business employees has continued to be maintained.
(e) Notwithstanding the foregoing provisions of this section, and
except as otherwise provided in this subsection, any taxpayer qualified and
certified under the provisions of K.S.A. 74-50,131, and amendments
thereto, that prior to making a commitment to invest in a qualified Kansas
business, has filed a certificate of intent to invest in a qualified business
facility in a form satisfactory to the secretary of commerce, shall be
entitled to a credit in an amount equal to 10% of that portion of the
qualified business facility investment that exceeds $50,000 in lieu of the
credit provided in subsection (b)(2) or (c)(2) without regard to the number
of qualified business facility employees engaged or maintained in
employment at the qualified business facility. For tax years beginning on
or after January 1, 2012, for a qualified business facility investment in
Douglas, Johnson, Sedgwick, Shawnee or Wyandotte county, such credit
shall be in an amount equal to 10% of that portion of the qualified business
facility investment that exceeds $1,000,000. Any taxpayer who has filed a
certificate of intent to invest in a qualified business facility pursuant to this
subsection in Douglas, Johnson, Sedgwick, Shawnee or Wyandotte county
prior to December 31, 2011, and commences investments in a qualified
business facility prior to December 31, 2013, may claim credits under
K.S.A. 74-50,131, 74-50,132 and 79-32,160a(e), and amendments thereto,
in an amount equal to 10% of that portion of the qualified business facility
investment that exceeds $50,000. Timing modifications may be authorized
at the discretion of the secretary of commerce and the secretary of revenue
during the transition period. The credit allowed by this subsection shall be
a one-time credit. If the amount thereof exceeds the tax imposed by the
Kansas income tax act on the taxpayer's Kansas taxable income or the
premium tax or privilege fees imposed pursuant to K.S.A. 40-252, and
amendments thereto, or the privilege tax as measured by net income of
financial institutions imposed pursuant to article 11 of chapter 79 of the
Kansas Statutes Annotated, and amendments thereto, for the taxable year,
the amount thereof that exceeds such tax liability may be carried forward
for credit in the succeeding taxable year or years until the total amount of
the tax credit is used, except that no such tax credit shall be carried
forward for deduction after the 16 th taxable year succeeding the taxable
year in which such credit initially was claimed, and no carryforward shall
be allowed for deduction in any succeeding taxable year unless the
taxpayer certifies under oath that the taxpayer continues to meet the
requirements of K.S.A. 74-50,131, and amendments thereto, and this act.
In no event shall any credit allowed under this section that expired during
any taxable year prior to the taxable year commencing January 1, 2011, be
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revived under the provisions of this act.
(f) For projects placed into service on and after January 1, 2021, a
taxpayer may transfer up to 50% of the tax credit allowed under subsection
(e), as provided in this subsection. The taxpayer may make a transfer to
one or more transferees, but the total of all transfers shall not exceed 50%
of the taxpayer's tax credit. The taxpayer shall make the transfer or
transfers within a single tax year. The credit may be transferred to any
individual or entity and shall be claimed in the year the credit was
transferred against the transferee's tax liability for the income tax under the
Kansas income tax act or the premium tax or privilege fees imposed
pursuant to K.S.A. 40-252, and amendments thereto, or the privilege tax as
measured by the net income of financial institutions imposed pursuant to
article 11 of chapter 79 of the Kansas Statutes Annotated, and amendments
thereto. The amount of the credit that exceeds the transferee's tax liability
for such year may be carried forward for credit in the succeeding taxable
year or years until the total amount of the tax credit is used, except that no
such credit shall be carried forward for deduction after the 16 th taxable
year succeeding the taxable year in which such credit was initially
claimed. The taxpayer or transferee shall provide such documentation of
the tax credit transfer to the secretary of revenue as may be required by the
secretary.
(g) In the event the tax credit earned by the taxpayer and transferred
to a transferee is later disallowed in whole or in part by the secretary of
revenue, the taxpayer that originally earned the tax credit shall be liable for
repayment to the state in the amount disallowed.
(h) For tax years commencing after December 31, 2005, any taxpayer
claiming credits pursuant to this section, as a condition for claiming and
qualifying for such credits, shall provide information pursuant to K.S.A.
79-32,243, and amendments thereto, as part of the tax return in which such
credits are claimed. Such credits shall not be denied solely on the basis of
the contents of the information provided by the taxpayer pursuant to
K.S.A. 79-32,243, and amendments thereto.
(i) This section and K.S.A. 79-32,160b, and amendments thereto,
shall be a part of and supplemental to the job expansion and investment
credit act of 1976, and amendments thereto.
Sec. 11. K.S.A. 74-50,136, 74-8947, 75-3712, 75-3713e, 75-4275,
79-201h, 79-225, 79-255, 79-1705, 79-3221f, 79-3288a, 79-32,117a, 79-
32,117b, 79-32,117c, 79-32,117d, 79-32,117e, 79-32,140, 79-32,140a, 79-
32,160b, 79-32,181, 79-32,181a, 79-32,192, 79-32,193, 79-32,206, 79-
32,214, 79-32,215, 79-32,238, 79-32,239, 79-32,240, 79-32,241, 79-
32,244, 79-32,257, 79-32,258, 79-32,259, 79-32,260, 79-32,262, 79-
32,264 and 79-32,272 and K.S.A. 2024 Supp. 79-32,117, 79-32,143a, 79-
32,160a and 79-32,203 are hereby repealed.
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Sec. 12. This act shall take effect and be in force from and after its
publication in the statute book.
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