The 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 maximum rate for this tax is set at 1% per annum. Revenue generated from the tax must be allocated for specific purposes: at least 50% of the earnings tax collected by a city must be used to reduce reliance on ad valorem property taxes for infrastructure, while counties must use the revenue for general purposes. Additionally, the bill mandates that any approved earnings tax must be resubmitted for voter approval every ten years.

The legislation also includes provisions for exemptions and credits against the earnings tax, such as allowing individuals exempt from state income tax to also be exempt from the earnings tax. Employers are required to deduct the tax from employee earnings and remit it to the respective city or county, with a percentage retained to compensate for the collection process. The bill amends existing statutes to reflect these changes and repeals previous sections that prohibited local income taxes, thereby enabling local governments to impose this new tax structure.

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