This bill amends various sections of the Kansas sales and compensating use tax laws, particularly concerning the taxation of food and prepared food. It reduces the tax rate on prepared food from 6.5% to 0% starting January 1, 2025, while also modifying the distribution of tax revenue. Specifically, the percentage allocated to the state highway fund will increase from 17% to 18% on January 1, 2025, and further to 19.736% on July 1, 2025. The bill clarifies definitions and exemptions related to food sales, stating that prepared food is only taxable if sold with eating utensils, and outlines exempt food items such as bakery products and certain unheated foods.

Additionally, the bill establishes a new tax rate structure for the distribution of tax revenues, including a city bond finance fund for redevelopment districts of statewide and local importance. It also introduces provisions for the collection and distribution of revenue from taxes on utilities used within designated intermodal facility districts, which will benefit the state highway fund. The bill repeals several existing statutes related to these tax provisions, indicating a comprehensive restructuring of the tax framework in Kansas aimed at providing tax relief on food sales while enhancing funding for state highway projects.

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