The bill amends Kansas sales and compensating use tax laws, specifically focusing on the taxation of food, food ingredients, and prepared food. It reduces the tax rate on prepared food from 17% and 18% to 6.5%, effective January 1, 2025, and sets the state rate on gross receipts from the sale of food and food ingredients to 0% starting January 1, 2023. Additionally, the bill modifies the distribution of tax revenue, increasing the percentage allocated to the state highway fund from 17% to 18% in 2025, and further to 19.736% by July 1, 2025. It also clarifies that certain types of prepared food sold without utensils will not be subject to tax and outlines the process for tax refunds related to isolated or occasional sales of motor vehicles or trailers.

Moreover, the bill introduces new provisions regarding the allocation of tax revenues, including the establishment of a city bond finance fund for revenue collected from redevelopment districts that support local and statewide tourism. It specifies that all revenue from the sale of gas, water, electricity, and heat within designated intermodal facility districts will be credited to the state highway fund, with certain tax exemptions not applying during this period. The bill repeals several existing statutes related to these tax provisions, indicating a significant restructuring of tax revenue management and allocation for highway funding and redevelopment projects. The act will take effect upon publication in the statute book.

Statutes affected:
As introduced: 79-3603, 79-3603d, 79-3620, 79-3703, 79-3710