This bill authorizes cities and counties in Kansas to propose and levy an earnings tax on nonresidents working within their jurisdictions, contingent upon approval from the local electorate. The earnings tax rate is capped at 1% per annum, and the revenue generated must be allocated for specific purposes: at least 50% for infrastructure in cities and for general county purposes in counties, with provisions to reduce reliance on ad valorem property taxes. The bill mandates that any approved earnings tax must be resubmitted to voters every ten years for continued approval. Additionally, it allows for certain exemptions and credits against the tax, including for individuals exempt from state income tax and for taxes paid to other jurisdictions.

The bill also includes provisions for the collection of the earnings tax by employers, who are required to deduct the tax from employee earnings and remit it to the respective city or county. Employers may retain a small percentage of the collected tax as compensation for their collection efforts. The legislation amends existing statutes to clarify that cities and counties may levy this tax, repealing previous restrictions on local income taxation. Overall, the bill aims to provide local governments with a new revenue source while ensuring accountability and periodic voter oversight.

Statutes affected:
As introduced: 45-229, 12-140, 19-101a, 19-101b