SESSION OF 2024
SUPPLEMENTAL NOTE ON SUBSTITUTE FOR SENATE
BILL NO. 377
As Recommended by Senate Committee on
Assessment and Taxation

Brief*
Sub. for SB 377 would make various changes to
income, sales, and property tax law. Specifically, the bill
would:
● Replace individual income tax brackets with a
single rate of 5.25 percent;
● Exempt Social Security income from the individual
income tax;
● Provide for annual standard deduction increases
by a cost-of-living adjustment;
● Provide for an increase to the personal exemption
amount and future personal exemption amount
increases by a cost-of-living adjustment;
● Reduce privilege tax rates;
● Accelerate the elimination of state sales and
compensating use tax on food and food ingredients
and the associated disposition of revenue changes;
and
● Increase the amount of the appraised value of
residential property exempt from the statewide
uniform 20 mill school finance levy to $100,000.

____________________
*Supplemental notes are prepared by the Legislative Research
Department and do not express legislative intent. The supplemental
note and fiscal note for this bill may be accessed on the Internet at
http://www.kslegislature.org
 The bill would be in effect upon publication in the
Kansas Register.
Individual Income Tax Single Rate
The bill would provide, beginning in tax year 2025, for a
single individual income tax rate of 5.25 percent to be applied
to all Kansas taxable income in excess of $12,300 for married
individuals filing joint returns and $6,150 for all other
individuals. Kansas taxable income less than those amounts
would not be taxed.
Social Security Benefit Income Taxation Cliff Phase Out
Beginning in tax year 2024, the bill would expand the
existing income tax exemption for federally taxable Social
Security benefits available to taxpayers with $75,000 or less
in federal adjusted gross income (FAGI) to phase out
taxpayer eligibility for the exemption through a linear
transition formula from $75,000 in FAGI to $100,000 in FAGI.
The bill would provide for annual increases of $5,000 to
the upper bound of the transition beginning in tax year 2025.
Standard Deduction Cost-of-Living Adjustment
The bill would, beginning in tax year 2024, provide for all
Kansas individual income tax standard deduction amounts to
be annually increased by the cost-of-living adjustment
determined under Section 1(f)(3) of the Internal Revenue
Code.
Personal Exemption Amount Increase and Cost-of-Living
Adjustment
The bill would increase the personal exemption amount
from $2,250 to $2,300 in tax year 2024 and provide for
personal exemption amounts to be annually increased by the

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cost-of-living adjustment determined under Section 1(f)(3) of
the Internal Revenue Code, beginning in tax year 2025.
The increase and cost-of-living adjustments would also
apply to the additional personal exemption amount for
veterans with 100 percent disability rating.
Financial Institutions Privilege Tax Rate Changes
The bill would reduce the privilege tax rates applied to
financial institutions.
For banks, the normal tax rate would be reduced from
2.25 percent to 1.63 percent for tax year 2025 and all years
thereafter.
For trust companies and savings and loan associations,
the normal tax rate would be reduced from 2.25 percent to
1.61 percent for tax year 2025 and all years thereafter.
[Note: The surtaxes on financial institutions would not be
affected by the bill.]
Food Sales Tax Changes
The bill would accelerate the elimination of the state
sales and compensating use tax rate on food and food
ingredients to April 1, 2024.
The bill would raise the percentage of sales tax revenue
distributed to the State Highway Fund to 18.0 percent of sales
and use tax receipts beginning April 1, 2024.
[Note: Under current law, the rate is scheduled to be
reduced to 0.0 percent on January 1, 2025, and the
proportion of sales and use tax receipts distributed to the
State Highway Fund is scheduled to be increased to 18.0
percent beginning January 1, 2025.]


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School Finance Levy Residential Exemption
The bill would increase, beginning in tax year 2024, the
amount of residential property exempt from the statewide
uniform 20 mill school finance levy to $100,000 of appraised
value.
A formula to increase the amount of the exemption
based upon the statewide average increase in residential
valuation over the preceding ten years would again take
effect in 2025.
Background
The Senate Committee on Assessment and taxation
agreed to remove the contents of SB 377, that would have
made income, privilege, sales and property tax changes, and
inserted the contents concerning income, sales, and property
tax of the Conference Committee Report (CCR) for HB 2284.
Additionally, provisions concerning a Social Security benefits
cliff phaseout were added from the CCR for SB 169 in the
place of Social Security benefits exemptions contained in the
CCR for HB 2284. The Senate Committee recommended
these changes be incorporated into a substitute bill.

Fiscal Information
A fiscal estimate for the substitute bill was not
immediately available.
Taxation; income tax; rates; brackets; privilege tax; Social Security benefits; standard
deduction; personal exemption; sales tax; food sales tax; State Highway Fund;
property tax; exemption amount


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Statutes affected:
As introduced: 79-201x, 72-5142, 79-1107, 79-1108, 79-32, 79-3603, 79-3603d, 79-3606, 79-3620, 79-3703, 79-3710
Version 2: 79-201x, 79-1107, 79-1108, 79-32, 79-3603, 79-3603d, 79-3620, 79-3703, 79-3710