This bill proposes comprehensive changes to income taxation in Kansas, including the introduction of an additional personal exemption for head of household tax filers and an increased personal exemption for certain disabled veterans. It modifies the definition of household income and establishes new rules for the apportionment of business income, transitioning to a single sales factor for most businesses and a receipts factor for financial institutions. The bill aims to reduce corporate income tax rates based on the growth of corporate income tax receipts, with a mechanism for calculating and publishing new tax rates by October 1, 2028. Additionally, it provides property tax exemptions for specific personal property, such as off-road vehicles and marine equipment, effective for taxable years commencing after December 31, 2025, and outlines the process for property owners to request these exemptions.

Furthermore, the bill introduces a new framework for calculating deferred tax impact deductions for taxpayers, particularly focusing on unitary groups of businesses required to file combined reports. It allows taxpayers to claim a deduction from their net business income before apportionment, which is designed to offset increases in net deferred tax liabilities or decreases in net deferred tax assets. The bill also amends existing provisions regarding the apportionment of business income for various taxpayers, clarifying methods for apportionment and specifying that starting January 1, 2027, all business income will be apportioned solely by the sales factor. Additionally, it establishes the multistate tax commission to enhance cooperation among states in tax administration and introduces provisions for interstate audits and arbitration to resolve disputes over tax apportionments. The bill aims to streamline tax processes, enhance clarity on tax liabilities, and improve fiscal accountability.

Statutes affected:
As introduced: 79-32
As Amended by House Committee: 79-32
As Amended by Senate Committee: 79-32, 79-4508a
Enrolled: 79-213, 79-1129, 79-3279, 79-3287, 79-32, 79-4301, 79-4508a, 79-5501