Division of the Budget
Landon State Office Building Phone: (785) 296-2436
900 SW Jackson Street, Room 504 adam.c.proffitt@ks.gov
Topeka, KS 66612 Division of the Budget http://budget.kansas.gov
Adam Proffitt, Director Laura Kelly, Governor


March 10, 2023


The Honorable Adam Smith, Chairperson
House Committee on Taxation
300 SW 10th Avenue, Room 346-S
Topeka, Kansas 66612
Dear Representative Smith:
SUBJECT: Fiscal Note for HB 2410 by House Committee on Taxation
In accordance with KSA 75-3715a, the following fiscal note concerning HB 2410 is
respectfully submitted to your committee.
Under current law, individual income tax rates are set at 3.1 percent for income under
$15,000 ($30,000 for married filing jointly), 5.25 percent for income between $15,000 and $30,000
(between $30,000 and $60,000 for married filing jointly), and 5.7 percent for income $30,000 and
over ($60,000 and over for married filing jointly). HB 2410 would increase the taxable income
amounts in the tax schedules annually by the amount adjusted by the cost-of-living adjustment
published in the Internal Revenue Code for the prior tax year beginning in tax year 2024. The
Secretary of Revenue would be required to publish the new tax schedules that would take effect
for the current tax year on or before April 1st. The bill also removes outdated language from
previous tax years.

Estimated State Fiscal Effect
FY 2023 FY 2023 FY 2024 FY 2024
SGF All Funds SGF All Funds
Revenue -- -- ($6,700,000) ($6,700,000)
Expenditure -- -- $29,795 $29,795
FTE Pos. -- -- -- --
The Department of Revenue estimates that HB 2410 would decrease State General Fund
revenues by $6.7 million in FY 2024, $27.5 million in FY 2025, and $43.3 million in FY 2026.
To formulate these estimates, the Department of Revenue reviewed 1.6 million tax returns from
The Honorable Adam Smith, Chairperson
Page 2—HB 2410

tax year 2020 and increased the current brackets by 4.0 percent for tax year 2024, 3.0 percent for
tax year 2025, and 2.0 percent for tax year 2026. The fiscal effect of adjusting the income tax
brackets by these inflation percentages is estimated to reduce income tax liability by $22.2 million
in tax year 2024, $39.7 million in tax year 2025, and $51.9 million in tax year 2026. The estimate
for FY 2024 includes 30.0 percent of tax year 2024 tax liability. The estimate for FY 2025 includes
70.0 percent of tax year 2024 tax liability and 30.0 percent of tax year 2025 tax liability.
The Department indicates that the bill would require $29,795 from the State General Fund
in FY 2024 to implement the bill and to modify the automated tax system. The required
programming for this bill by itself would be performed by existing staff of the Department of
Revenue. In addition, if the combined effect of implementing this bill and other enacted legislation
exceeds the Department’s programming resources, or if the time for implementing the changes is
too short, additional expenditures for outside contract programmer services beyond the
Department’s current budget may be required.
The Department of Administration indicates that adjusting state income tax collections has
the potential to have a fiscal effect on the amount of revenue collected from its debt setoff program.
This program intercepts individual income tax refunds and homestead tax refunds and applies
those amounts to debts owed to state agencies, municipalities, district courts, and state agencies in
other states. Debts include, but are not limited to child support, taxes, educational expenses, fines,
services provided to the debtor, and court ordered restitution. As the dollar amounts of refunds
are increased, the amount available for possible debt setoffs is also increased. However, the
Department is unable to make an estimate of the amount of additional debt setoffs that would be
intercepted as a result of the bill. Any fiscal effect associated with HB 2410 is not reflected in The
FY 2024 Governor’s Budget Report.


Sincerely,

Adam Proffitt
Director of the Budget

cc: Lynn Robinson, Department of Revenue
Tamara Emery, Department of Administration


Statutes affected:
As introduced: 79-32