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{As Amended by Senate Committee of the Whole}
Session of 2026
SENATE BILL No. 498
By Committee on Assessment and Taxation
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AN ACT concerning taxation; relating to income tax; {providing a tax
credit for expenditures for lockable gun and ammunition storage; }
providing a tax credit for the retail sale of higher ethanol blends of fuel;
discontinuing the tax credit for qualified alternative-fueled motor
vehicle property or fueling station expenditures; {repealing unused tax
credits relating to agritourism liability insurance, assistive technology
contributions, declared disaster capital investment, environmental
compliance, owners promoting employment across Kansas and swine
facility improvement;} amending K.S.A. {65-7107 and }79-32,201 and
repealing the existing section {sections; also repealing K.S.A. 79-
32,204, 79-32,222, 79-32,262 and 79-32,266 and K.S.A. 2025 Supp.
32-1438}.
Be it enacted by the Legislature of the State of Kansas:
{Section 1. On and after January 1, 2027, K.S.A. 65-7107 is hereby
amended to read as follows: 65-7107. (a) Appropriate state agencies are
hereby directed to amend their the state plans of such agencies to protect
the benefits of those families and individuals receiving such benefits by
adding language consistent with the following: Any funds in an
individual development account, including accrued interest, shall be
disregarded when determining eligibility to receive the amount of any
public assistance or benefits.
(b) A program contributor shall be allowed a credit against state
income tax imposed under the Kansas income tax act in an amount equal
to 25% of the contribution amount.
(c) The institute shall verify all tax credit claims by contributors. The
administration of the community-based organization, with the cooperation
of the participating financial institutions, shall submit the names of
contributors and the total amount each contributor contributes to the
individual development account reserve fund for the calendar year. The
institute shall determine the date by which such information shall be
submitted to the institute by the local administrator. The institute shall
submit verification of qualified tax credits pursuant to K.S.A. 65-7101
through 65-7107, and amendments thereto, to the department of revenue.
(d) The total tax credits authorized pursuant to this section shall not
exceed $6,250 in any fiscal year.
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(e) The provisions of this section shall be applicable to all taxable
years commencing after December 31, 2002.
(f) For tax year 2013 and all tax years thereafter, the income tax
credit provided by this section shall only be available to taxpayers subject
to the income tax on corporations imposed pursuant to subsection (c) of
K.S.A. 79-32,110, and amendments thereto, and shall be applied only
against such taxpayer's corporate income tax liability.
New Sec . 2. (a ) For tax years 2026 through 2028 , there shall be
allowed a credit against the tax liability of a resident individual imposed
under the Kansas income tax act in an amount equal to 25% of the
expenditures made by the individual during such tax year to purchase
lockable gun and ammunition storage that is designed primarily for gun
and ammunition storage . The amount of such credit allowed each tax
year shall not exceed $250 for any taxpayer.
(b) If the amount of the credit allowed by subsection (a) exceeds the
taxpayer's income tax liability imposed under the Kansas income tax act
for the tax year in which the credit is allowed, the amount of credit that
exceeds such tax liability may be carried forward for deduction from the
taxpayer's income tax liability in the next succeeding tax year or years
until the total amount of the credit has been deducted from tax
liability.
Sec. 3. } K.S.A. 79-32,201 is hereby amended to read as follows: 79-
32,201. (a) Any taxpayer who makes expenditures for a qualified
alternative-fueled motor vehicle or alternative-fuel fueling station shall be
allowed a credit against the income tax imposed by article 32 of chapter 79
of the Kansas Statutes Annotated, as follows:
(1) For any qualified alternative-fueled motor vehicle placed in
service on or after January 1, 1996, and before January 1, 2005, an amount
equal to 50% of the incremental cost or conversion cost for each qualified
alternative-fueled motor vehicle but not to exceed $3,000 for each such
motor vehicle with a gross vehicle weight of less than 10,000 lbs.; $5,000
for a heavy duty motor vehicle with a gross vehicle weight of greater than
10,000 lbs. but less than 26,000 lbs.; and $50,000 for motor vehicles
having a gross vehicle weight of greater than 26,000 lbs.;
(2) For any qualified alternative-fueled motor vehicle placed in
service on or after January 1, 2005, and before January 1, 2027, an
amount equal to 40% of the incremental cost or conversion cost for each
qualified alternative-fueled motor vehicle, but not to exceed $2,400 for
each such motor vehicle with a gross vehicle weight of less than 10,000
lbs.; $4,000 for a heavy duty motor vehicle with a gross vehicle weight of
greater than 10,000 lbs. but less than 26,000 lbs.; and $40,000 for motor
vehicles having a gross vehicle weight of greater than 26,000 lbs.;
(3) for any qualified alternative-fuel fueling station placed in service
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on or after January 1, 1996, and before January 1, 2005, an amount equal
to 50% of the total amount expended for each qualified alternative-fuel
fueling station but not to exceed $200,000 for each fueling station;
(4) for any qualified alternative-fuel fueling station placed in service
on or after January 1, 2005, and before January 1, 2009, an amount equal
to 40% of the total amount expended for each qualified alternative-fuel
fueling station, but not to exceed $160,000 for each fueling station;
(5)(2) for any qualified alternative-fuel fueling station placed in
service on or after January 1, 2009, and before January 1, 2027, an
amount equal to 40% of the total amount expended for each qualified
alternative-fuel fueling station, but not to exceed $100,000 for each fueling
station.
(b) If no credit has been claimed pursuant to subsection (a), a credit in
an amount not exceeding the lesser of 5% of the cost of the vehicle or
$750 shall be allowed to a taxpayer who purchases a motor vehicle
equipped by the vehicle manufacturer with an alternative fuel system and
who is unable or elects not to determine the exact basis attributable to such
property. The credit under this subsection shall be allowed only to the first
individual to take title to such motor vehicle, other than for resale. The
credit under this subsection for motor vehicles which are capable of
operating on a blend of 85% ethanol and 15% gasoline shall be allowed for
taxable years commencing after December 31, 1999, and before January
1, 2027, only if the individual claiming the credit furnishes evidence of the
purchase, during the period of time beginning with the date of purchase of
such vehicle and ending on December 31 of the next succeeding calendar
year, of 500 gallons of such ethanol and gasoline blend as may be required
or is satisfactory to the secretary of revenue.
(c) The tax credit under subsection (a)(1) through (a)(4) or (b) shall
be deducted from the taxpayer's income tax liability for the taxable year in
which the expenditures are made by the taxpayer. If the amount of the tax
credit exceeds the taxpayer's income tax liability for the taxable year, the
amount which exceeds the tax liability may be carried over for deduction
from the taxpayer's income tax liability in the next succeeding taxable year
or years until the total amount of the tax credit has been deducted from tax
liability, except that no such tax credit shall be carried over for deduction
after the third taxable year succeeding the taxable year in which the
expenditures are made.
(d) The tax credit under subsection (a)(5) (a)(2) shall be deducted
from the taxpayer's income tax liability for the taxable year in which the
expenditures are made by the taxpayer. If the amount of the tax credit
exceeds the taxpayer's income tax liability for the taxable year, the amount
which exceeds the tax liability may be carried over for deduction from the
taxpayer's income tax liability in the next succeeding taxable year or years
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until the total amount of the tax credit has been deducted from tax liability,
except that no such tax credit shall be carried over for deduction after the
fourth taxable year in which the expenditures are made.
(e) As used in this section subsections (a) through (g):
(1) "Alternative fuel" means a combustible liquid derived from grain
starch, oil seed, animal fat or other biomass; or produced from biogas
source, including any nonfossilized, decaying, organic matter.
(2) "Qualified alternative-fueled motor vehicle" means a motor
vehicle that operates on an alternative fuel, meets or exceeds the clean fuel
vehicle standards in the federal clean air act amendments of 1990, Title II
and meets one of the following categories:
(A) Bi-fuel motor vehicle: A motor vehicle with two separate fuel
systems designed to run on either an alternative fuel or conventional fuel,
using only one fuel at a time;
(B) dedicated motor vehicle: A motor vehicle with an engine designed
to operate on a single alternative fuel only; or
(C) flexible fuel motor vehicle: A motor vehicle that may operate on a
blend of an alternative fuel with a conventional fuel, such as E-85 (85%
ethanol and 15% gasoline) or M-85 (85% methanol and 15% gasoline), as
long as such motor vehicle is capable of operating on at least an 85%
alternative fuel blend.
(3) "Qualified alternative-fuel fueling station" means the property
which is directly related to the delivery of alternative fuel into the fuel tank
of a motor vehicle propelled by such fuel, including the compression
equipment, storage vessels and dispensers for such fuel at the point where
such fuel is delivered but only if such property is primarily used to deliver
such fuel for use in a qualified alternative-fueled motor vehicle.
(4) "Incremental cost" means the cost that results from subtracting the
manufacturer's list price of the motor vehicle operating on conventional
gasoline or diesel fuel from the manufacturer's list price of the same model
motor vehicle designed to operate on an alternative fuel.
(5) "Conversion cost" means the cost that results from modifying a
motor vehicle which is propelled by gasoline or diesel to be propelled by
an alternative fuel.
(6) "Taxpayer" means any person who owns and operates a qualified
alternative-fueled vehicle licensed in the state of Kansas or who makes an
expenditure for a qualified alternative-fuel fueling station.
(7) "Person" means every natural person, association, partnership,
limited liability company, limited partnership or corporation.
(f) Except as otherwise more specifically provided, the provisions of
this section shall apply to all taxable years commencing after December
31, 1995.No tax credits shall be allowed pursuant to subsections (a)
through (g) for tax years commencing after December 31, 2026, except
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that for taxpayers who have excess unused credit pursuant to a credit
initially claimed under subsections (a) through (g) for a tax year
commencing before January 1, 2027, the credit carry over provisions of
subsections (c) and (d) still apply.
(g) For tax year 2013 and all tax years thereafter, the income tax
credit provided by this section subsections (a) through (g) shall only be
available to taxpayers subject to the income tax on corporations imposed
pursuant to subsection (c) of K.S.A. 79-32,110 (c), and amendments
thereto, and shall be applied only against such taxpayer's corporate income
tax liability.
(h) (1) For taxable years 2026 through 2031 {2028}, there shall be
allowed a credit against the tax liability imposed under the Kansas income
tax act for a retail dealer that sells higher ethanol blend at such retail
dealer's retail service station. The amount of the credit shall equal $0.05
per gallon of higher ethanol blend sold by the retail dealer on a retail
basis and dispensed through metered pumps at the retail dealer's retail
service station during the tax year for which the tax credit is claimed.
(2) Any unused credit amounts may be carried forward for up to five
{three} taxable years immediately following the taxable year for which the
credits were allowed. The credit shall not be refundable.
(3) The total amount of tax credits issued pursuant to this subsection
shall not exceed $2,500,000 per tax year. In the event that the total amount
of tax credits claimed under this subsection exceeds the maximum amount
of tax credits available for the tax year, the maximum total amount of tax
credits for the tax year of $2,500,000 shall be apportioned or divided
among all eligible retail dealers that claimed the tax credit on or before
April 15 following the close of the taxable year. In an apportionment, each
such eligible retail dealer's share of the tax credit shall be in the
proportion that the number of gallons of higher ethanol blend sold and
reported to the department by such retail dealer bears to the total of all
gallons of higher ethanol blend sold and reported to the department by all
eligible retail dealers claiming the tax credit on or before the deadline.
(4) As part of any claim for tax credits pursuant to this subsection,
the retail dealer shall include an annual report to the department on a
form prescribed by the department. The report shall include the following
information:
(A) The name and address of the retail dealer;
(B) the total number of gallons of higher ethanol blend sold by the
retail dealer on a retail basis and dispensed through metered pumps at the
retail service station or stations owned or operated by the retail dealer
during the tax year for which the tax credit is claimed; and
(C) any other documentation or information required by the
department.
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(5) As used in this subsection:
(A) "Department" means the department of revenue.
(B) "Higher ethanol blend" means ethanol blended fuel E15, as
defined in 40 C.F .R. § 1090.80, as in effect on July 1, 2026, or any higher
percent ethanol blend.
(C) "Retail dealer" means a person, firm or corporation doing
business in this state that owns or operates a retail service station in this
state.
(D) "Retail service station" means a location in this state from which
higher ethanol blend is sold to the general public and is dispensed directly
into motor vehicle fuel tanks for consumption.}
Sec. 2. {4.} K.S.A. 79-32,201 is hereby repealed.
{Sec. 5. On and after January 1, 2027, K.S.A. 65-7107, 79-32,204,
79-32,222, 79-32,262 and 79-32,266 and K.S.A. 2025 Supp. 32-1438 are
hereby repealed.}
Sec. 3. {6.} This act shall take effect and be in force from and after its
publication in the statute book.
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