The bill amends Kansas sales and compensating use tax laws, particularly concerning the taxation of food, food ingredients, and prepared food. It introduces a new tax rate of 0% on the gross receipts from the sale of food and food ingredients, effective January 1, 2025, while reducing the tax rate on prepared food. Additionally, the bill modifies the distribution of tax revenue, increasing the percentage allocated to the state highway fund from 17% to 18% starting January 1, 2025, and further to 19.736% on July 1, 2025. Key deletions from current law include the previous tax rates for food and food ingredients, which were set to decrease from 4% to 2% before reaching 0%, and specific exemptions related to prepared food, allowing for a broader application of the new tax structure.

Moreover, the bill establishes a new tax rate structure for the allocation of tax revenues, ensuring that 19.736% of the collected tax revenue will be directed to the state highway fund starting January 1, 2025. It also creates a city bond finance fund for revenue collected from taxpayers within redevelopment districts of statewide and local importance. The bill clarifies provisions related to the crediting of tax revenues from STAR bond projects and intermodal facility districts, with expiration dates linked to the retirement of special obligation bonds. By repealing existing statutes related to taxation and revenue collection, the legislation aims to streamline the legal framework and enhance funding for state highway projects while ensuring proper allocation of tax revenues from significant redevelopment initiatives. The bill will take effect upon its publication in the statute book.

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