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SENATE BILL No. 300
AN ACT concerning taxation; relating to income tax; providing for the apportionment of
business income for manufacturers of alcoholic liquor depending on whether the
taxpayer is a qualifying Kansas investor or a general manufacturer; relating to
addition and subtraction modifications; removing obsolete reference to global
intangible low-taxed income provided for under the federal internal revenue code;
reconciling multiple amendments to the same statute; amending K.S.A. 2025 Supp.
79-3279 and 79-32,117, as amended by section 4 of 2026 Senate Bill No. 368, and
repealing the existing sections; also repealing K.S.A. 2025 Supp. 79-32,117, as
amended by section 2 of 2026 House Bill No. 2602.
Be it enacted by the Legislature of the State of Kansas:
Section 1. K.S.A. 2025 Supp. 79-3279 is hereby amended to read
as follows: 79-3279. (a) For tax years commencing before January 1,
2027, all business income of railroads and interstate motor carriers of
persons or property for hire shall be apportioned to this state by
multiplying the business income by a fraction, in the case of railroads,
the numerator of which is the freight car miles in this state and the
denominator of which is the freight car miles everywhere, and, in the
case of interstate motor carriers, the numerator of which is the total
number of miles operated in this state and the denominator of which is
the total number of miles operated everywhere.
(b) For tax years commencing before January 1, 2027, all business
income of any other taxpayer shall be apportioned to this state by one
of the following methods:
(1) By multiplying the business income by a fraction, the
numerator of which is the property factor plus the payroll factor plus
the sales factor, and the denominator of which is three; or
(2) at the election of a qualifying taxpayer, by multiplying the
business income by a fraction, the numerator of which is the property
factor plus the sales factor, and the denominator of which is two.
(A) For purposes of this subsection (b)(2), a qualifying taxpayer is
any taxpayer whose payroll factor for a taxable year exceeds 200% of
the average of the property factor and the sales factor. Whenever two or
more corporations are engaged in a unitary business and required to file
a combined report, the fraction comparison provided by this subsection
(b)(2) shall be calculated by using the payroll factor, property factor
and sales factor of the combined group of unitary corporations.
(B) An election under this subsection (b)(2) shall be made by
including a statement with the original tax return indicating that the
taxpayer elects to apply the apportionment method under this
subsection (b)(2). The election shall be effective and irrevocable for the
taxable year of the election and the following nine taxable years. The
election shall be binding on all members of a unitary group of
corporations. Notwithstanding the above, the secretary of revenue may
upon the request of the taxpayer, grant permission to terminate the
election under this subsection (b)(2) prior to expiration of the ten-year
10-year period.
(3) At the election of a qualifying telecommunications company,
by multiplying the business income by a fraction, the numerator of
which is the information carrying capacity of wire and fiber optic cable
available for use in this state, and the denominator of which is the
information carrying capacity of wire and fiber optic cable available for
use everywhere during the tax year.
(A) For purposes of this subsection (b)(3) paragraph, a qualifying
telecommunications company is a telecommunications company that is
a qualifying taxpayer under subsection (b)(2)(A).
(B) A qualifying telecommunications company shall make the
election under this paragraph in the same manner as provided under
subsection (b)(2)(B).
(4) At the election of a distressed area taxpayer, by multiplying the
business income by the sales factor. The election shall be made by
SENATE BILL No. 300—page 2
including a statement with the original tax return indicating that the
taxpayer elects to apply this apportionment method. The election may
be made only once , it must be made on or before December 31, 1999 ,
and it such election shall be effective for the taxable year of the election
and the following nine taxable years for so long as the taxpayer
maintains the payroll amount prescribed by K.S.A. 79-3271(j), and
amendments thereto.
(5) At the election of the taxpayer made at the time of filing of the
original return, the qualifying business income of any investment funds
service corporation organized as a corporation or S corporation which
that maintains its primary headquarters and operations or is a branch
facility that employs at least 100 individuals on a full-time equivalent
basis in this state and has any investment company fund shareholders
residenced in this state shall be apportioned to this state as provided in
this subsection, as follows:
(A) By multiplying the investment funds service corporation's
qualifying business income from administration, distribution and
management services provided to each investment company by a
fraction, the numerator of which shall be the average of the number of
shares owned by the investment company's fund shareholders
residenced in this state at the beginning of and at the end of the
investment company's taxable year that ends with or within the
investment funds service corporation's taxable year, and the
denominator of which shall be the average of the number of shares
owned by the investment company's fund shareholders everywhere at
the beginning of and at the end of the investment company's taxable
year that ends with or within the investment funds service corporation's
taxable year.
(B) A separate computation shall be made to determine the
qualifying business income from each fund of each investment
company. The qualifying business income from each investment
company shall be multiplied by the fraction calculated pursuant to
paragraph (A) for each fund of such investment company.
(C) The qualifying portion of total business income of an
investment funds service corporation shall be determined by
multiplying such total business income by a fraction, the numerator of
which is the gross receipts from the provision of management,
distribution and administration services to or on behalf of an
investment company, and the denominator of which is the gross
receipts of the investment funds service company. To the extent an
investment funds service corporation has business income that is not
qualifying business income, such business income shall be apportioned
to this state pursuant to subsection (b)(1).
(D) For tax year 2002, the tax liability of an investment funds
service corporation that has elected to apportion its business income
pursuant to this paragraph (5) shall be increased by an amount equal to
50% of the difference of the amount of such tax liability if determined
pursuant to subsection (b)(1) less the amount of such tax liability
determined with regard to this paragraph (5).
(E) When an investment funds service corporation is part of a
unitary group, the business income of the unitary group attributable to
the investment funds service corporation shall be determined by
multiplying the business income of the unitary group by a fraction, the
numerator of which is the property factor plus the payroll factor plus
the sales factor, and the denominator of which is three. The property
factor is a fraction, the numerator of which is the average value of the
investment funds service corporation's real and tangible personal
property owned or rented and used during the tax period and the
denominator of which is the average value of the unitary group's real
SENATE BILL No. 300—page 3
and tangible personal property owned or rented and used during the tax
period. The payroll factor is a fraction, the numerator of which is the
total amount paid during the tax period by the investment funds service
corporation for compensation, and the denominator of which is the total
compensation paid by the unitary group during the tax period. The sales
factor is a fraction, the numerator of which is the total sales of the
investment funds service corporation during the tax period, and the
denominator of which is the total sales of the unitary group during the
tax period.
(F) A taxpayer seeking to make the election available pursuant to
subsection (b)(5) this paragraph shall only be eligible to continue to
make such election if the taxpayer maintains at least 95% of the Kansas
employees in existence at the time the taxpayer first makes such an
election.
(6) At the election of a qualifying taxpayer, by multiplying such
taxpayer's business income by the sales factor. The election shall be
made by including a statement with the original tax return indicating
that the taxpayer elects to apply this apportionment method. The
election may be made only once and must be made on or before the last
day of the taxable year during which the investment described in
paragraph (A) is placed in service, but not later than December 31,
2009, and it the election shall be effective for the taxable year of the
election and the following nine taxable years or for so long as the
taxpayer maintains the wage requirements set forth in paragraph (A). If
the qualifying taxpayer is a member of a unitary group of corporations,
all other members of the unitary group doing business within this state
shall apportion their business income to this state pursuant to
subsection (b)(1).
(A) For purposes of this subsection, a qualifying taxpayer is any
taxpayer making an investment of $100,000,000 for construction in
Kansas of a new business facility identified under the North American
industry classification system (NAICS) subsectors of 31-33, as
assigned by the secretary of the department of labor, employing 100 or
more new employees at such facility after July 1, 2007, and prior to
December 31, 2009, and meeting the following requirements for paying
such employees higher-than-average wages within the wage region for
such facility:
(i) The taxpayer's new Kansas business facility with 500 or fewer
full-time equivalent employees will provide an average wage that is
above the average wage paid by all Kansas business facilities that share
the same assigned NAICS category used to develop wage thresholds
and that have reported 500 or fewer employees to the Kansas
department of labor on the quarterly wage reports;
(ii) the taxpayer's new Kansas business facility with 500 or fewer
full-time equivalent employees is the sole facility within its assigned
NAICS category that has reported wages for 500 or fewer employees to
the Kansas department of labor on the quarterly wage reports;
(iii) the taxpayer's new Kansas business facility with more than
500 full-time equivalent employees will provide an average wage that
is above the average wage paid by all Kansas business facilities that
share the same assigned NAICS category used to develop wage
thresholds and that have reported more than 500 employees to the
Kansas department of labor on the quarterly wage reports;
(iv) the taxpayer's new Kansas business facility with more than
500 full-time equivalent employees is the sole facility within its
assigned NAICS category that has reported wages for more than 500
employees to the Kansas department of labor on the quarterly wage
reports, in which event it, the taxpayer shall either provide an average
wage that is above the average wage paid by all Kansas business
SENATE BILL No. 300—page 4
facilities that share the same assigned NAICS category and that have
reported wages for 500 or fewer employees to the Kansas department
of labor on the quarterly wage reports, or be the sole Kansas business
facility within its the taxpayer's assigned NAICS category that has
reported wages to the Kansas department of labor on the quarterly
wage reports;
(v) the number of NAICS digits to use in developing each set of
wage thresholds for comparison purposes shall be determined by the
secretary of commerce;
(vi) the composition of wage regions used in connection with each
set of wage thresholds shall be determined by the secretary of
commerce; and
(vii) alternatively, a taxpayer may wage-qualify its new Kansas
business facility if, after excluding the headcount and wages reported
on the quarterly wage reports to the Kansas department of labor for
employees at that new Kansas business facility who own five percent
5% or more equity in the taxpayer, the average wage calculated for the
taxpayer's new Kansas business facility is greater than or equal to 1.5
times the aggregate state-wide average wage paid by industries covered
by the employment security law based on data maintained by the
secretary of labor.
(B) For the purposes of the wage requirements in paragraph (A),
the number of full-time equivalent employees shall be determined by
dividing the number of hours worked by part-time employees during
the pertinent measurement interval by an amount equal to the
corresponding multiple of a 40-hour work week and adding the
quotient to the average number of full-time employees.
(C) When the qualifying taxpayer is part of a unitary group, the
business income of the unitary group attributable to the qualifying
taxpayer shall be determined by multiplying the business income of the
unitary group by a fraction, the numerator of which is the property
factor plus the payroll factor plus the sales factor, and the denominator
of which is three. The property factor is a fraction, the numerator of
which is the average value of the qualifying taxpayer's real and tangible
personal property owned or rented and used during the tax period and
the denominator of which is the average value of the unitary group's
real and tangible personal property owned or rented and used during
the tax period. The payroll factor is a fraction, the numerator of which
is the total amount paid during the tax period by the qualifying taxpayer
for compensation, and the denominator of which is the total
compensation paid by the unitary group during the tax period. The sales
factor is a fraction, the numerator of which is the total sales of the
qualifying taxpayer during the tax period, and the denominator of
which is the total sales of the unitary group during the tax period.
(D) For purposes of this subsection, the secretary of revenue, upon
a showing of good cause and after receiving a certification by the
secretary of commerce of substantial compliance with provisions of this
subsection (b)(6), may extend any required performance date provided
in this subsection (b)(6) for a period not to exceed six months.
(c) For tax years commencing on or after January 1, 2027, all
business income shall be apportioned to this state by multiplying the
business income by the sales factor.
(d) Any taxpayer having previously made an election pursuant to
subsection (b)(2) shall be permitted to apportion income through the
use of the single sales factor.
(e) (1) There shall be allowed as a deduction an amount computed
in accordance with this subsection.
(2) As of July 1, 2025, only publicly traded companies, including
affiliated corporations participating in the filing of a publicly traded
SENATE BILL No. 300—page 5
company's financial statements prepared in accordance with generally
accepted accounting principles, shall be eligible for this deduction.
(3) If the provisions of this section result in an aggregate increase
in the taxpayer's net deferred tax liability or an aggregate decrease in
the taxpayer's net deferred tax asset, or an aggregate change from a net
deferred tax asset to a net deferred tax liability, the taxpayer shall be
entitled to a deduction, as determined in this subsection. For the
purposes of this section, the term "taxpayer" includes a unitary group of
businesses that is required to file a combined report. The deferred tax
impact deduction provided under this section for a unitary group of
businesses that is required to file a combined report shall be calculated
using unitary net deferred tax assets and liabilities and deducted against
unitary group income.
(4) A taxpayer shall be entitled to a deferred tax impact deduction
from the taxpayer's net business income before apportionment equal to
the amount necessary to offset the increase in the net deferred tax
liability or decrease in the net deferred tax asset, or aggregate change
from a net deferred tax asset to a net deferred tax liability. Such
increase in the net deferred tax liability, decrease in the net deferred tax
asset or the aggregate change from a net deferred tax asset to a net
deferred tax liability shall be computed based on the change that would
result from the imposition of the single sales factor requirements
pursuant to this section, excluding the deduction provided under this
paragraph, as of the end of the tax year prior to tax year 2025. The
amount of the deduction shall equal the annual deferred tax deduction
amount set forth in paragraph (5).
(5) The annual deferred tax deduction amount shall be calculated
as follows:
(A) The deferred tax impact determined in paragraph (4) shall be
divided by the income tax rate for corporations in effect for the tax year
pursuant to K.S.A. 79-32,110, and amendments thereto;
(B) the resulting amount shall be further divided by the Kansas
apportionment factor that was used by the taxpayer in the calculation of
the deferred tax assets and deferred tax liabilities as provided in this
subsection; and
(C) the result multiplied by 1/10 shall represent the total net
deferred tax deduction available for the first tax year beginning on or
after January 1, 2035, and the next nine successive tax years.
(6) The deduction calculated under paragraph (5) shall not be
adjusted as a result of any events subsequent to such calculation,
including, but not limited to, any disposition or abandonment of assets.
Such deduction shall be calculated without regard to any tax liabilities
under the federal internal revenue code and shall not alter the tax basis
of any asset. If the deduction under this section is greater than the
taxpayer's net business income before apportionment, any excess
deduction shall be carried forward and applied as a deduction for future
tax years until fully utilized.
(7) At the discretion of the taxpayer, the taxpayer shall be allowed
to claim other available tax credits before claiming the deferred tax
deduction calculated under this section. Any deferred tax deduction
calculated under this section not claimed on a return shall be carried
forward and applied as a deduction for future tax years until fully
utilized.
(8) Any taxpayer intending to claim a deduction under this
subsection shall file a statement with the secretary on or before July 1,
2027, specifying the total amount of the deduction that the taxpayer
claims on such form and in such manner as prescribed by the secretary
and shall contain such information or calculations as the secretary may
specify. No deduction shall be allowed under this section for any
SENATE BILL No. 300—page 6
taxable year except to the extent claimed in the manner prescribed on
or before July 1, 2027.
(9) For purposes of this subsection:
(A) "Net deferred tax liability" means deferred tax liabilities that
exceed the deferred tax assets of the taxpayer, as computed in
accordance with generally accepted accounting principles.
(B) "Net deferred tax asset" means that deferred tax assets exceed
the deferred tax liabilities of the taxpayer, as computed in accordance
with generally accepted accounting principles.
(f) Any manufacturer of alcoholic liquor as defined in K.S.A. 41-
102, and amendments thereto, who sells to a distributor as defined in
K.S.A. 41-102, and amendments thereto, shall be apportioned to this
state by multiplying the business income by a fraction, the numerator of
which is the property factor plus the payroll factor and the sales factor,
and the denominator of which is three. (1) Notwithstanding any other
provision of this section, for all tax years commencing on or after
January 1, 2027, any taxpayer classified as a manufacturer of
alcoholic liquor, as defined in K.S.A. 41-102, and amendments thereto,
shall apportion business income to this state as follows:
(A) Qualifying Kansas investors shall apportion business income
using the single sales factor method if such taxpayer maintains both:
(i) An average value of real and tangible personal property owned
or rented that exceeds $5,000,000 and such property is used in this
state during the tax year; and
(ii) the total amount of compensation paid in this state during the
tax year exceeded $2,000,000; or
(B) general manufacturers, including all other manufacturers of
alcoholic liquor besides qualifying Kansas investors, shall apportion
business income using the three-factor formula provided in subsection
(b)(1).
(2) The secretary of revenue may adopt rules and regulations
necessary to administer the provisions of this subsection.
Sec. 2. K.S.A. 2025 Supp. 79-32,117, as amended by section 4 of
2026 Senate Bill No. 368, 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
SENATE BILL No. 300—page 7
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 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.
(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.
(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.
SENATE BILL No. 300—page 8
(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 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
SENATE BILL No. 300—page 9
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, 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. 58-
4904, and amendments thereto, or were not held for the minimum
length of time required pursuant to K.S.A. 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. 58-4904(e),
and amendments thereto.
SENATE BILL No. 300—page 10
(xxix) For all taxable years beginning after December 31, 2024,
the amount of any contributions to, or earnings from, an adoption
savings account if distributions from the account were not used to pay
for expenses or transactions authorized pursuant to K.S.A. 2025 Supp.
38-2504, and amendments thereto, or were not held for the minimum
length of time required pursuant to K.S.A. 2025 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. 2025 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 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).
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(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 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
SENATE BILL No. 300—page 12
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
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
SENATE BILL No. 300—page 13
extent the expenses are not already subtracted from the taxpayer's
federal adjusted gross income. In no circumstances shall the subtraction
modification 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" does 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 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. 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
SENATE BILL No. 300—page 14
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 20th 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. 2025 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 return; or (2) amounts received as income earned from
assets in an adoption savings account.
(xxxi) For all taxable years beginning after December 31, 2026:
(1) Amounts of qualified health care sharing expenses paid by a
qualified individual taxpayer during the taxable year as provided in
section 3 of 2026 Senate Bill No. 368 , and amendments thereto, to the
extent that such amounts are not already deducted on the taxpayer's
federal income tax return for such taxable year when determining the
taxpayer's federal adjusted gross income or are not otherwise subtracted
or deducted from the taxpayer's federal adjusted gross income and in an
amount not to exceed $5,000 for an individual or $10,000 for a married
couple filing a joint return; and (2) amounts of qualified health care
share received by a qualified individual taxpayer during the taxable
year and used for medical expenses as provided in section 3 of 2026
Senate Bill No. 368 , and amendments thereto, to the extent that such
amounts are included in the taxpayer's federal adjusted gross income
and are not otherwise subtracted or deducted from the taxpayer's
federal adjusted gross income.
(xxxii) For all taxable years beginning after December 31, 2026,
the amount contributed to a portable benefit plan by a hiring party
taxpayer through the portable benefit plan account pursuant to section
1 of 2026 House Bill No. 2602, and amendments thereto, to the extent
that such contributions are not already deducted on the taxpayer's
federal income tax return for such taxable year when determining the
taxpayer's federal adjusted gross income or are not otherwise
subtracted or deducted from the taxpayer's federal adjusted gross
SENATE BILL No. 300—page 15
income.
(xxxiii) For all taxable years beginning after December 31, 2026,
the amount contributed to a portable benefit plan pursuant to section
1(c)(1) or (2) of 2026 House Bill No. 2602, and amendments thereto, to
the extent that such amount is included in the independent contractor
taxpayer's federal adjusted gross income.
(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. 3. K.S.A. 2025 Supp. 79-3279, 79-32,117, as amended by
section 4 of 2026 Senate Bill No. 368, and 79-32,117, as amended by
section 2 of 2026 House Bill No. 2602, are hereby repealed.
Sec. 4. 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.