This bill amends various sections of the Kansas sales and compensating use tax laws, primarily targeting the taxation of food, food ingredients, and prepared food. It reduces the tax rate on prepared food from previous rates of 17% and 18% to a new rate of 6.5%, effective January 1, 2025. Additionally, starting July 1, 2025, the bill increases the percentage of revenue from this tax allocated to the state highway fund from 18% to 19.736%. The tax rate on food and food ingredients is also set to 0% beginning January 1, 2025, replacing the previously scheduled rates of 4% and 2%. The bill clarifies that certain food items sold without eating utensils will not be subject to the prepared food tax, aiming to simplify the tax structure while enhancing support for highway funding.

Moreover, the bill introduces a city bond finance fund for revenue collected from taxpayers in redevelopment districts of statewide and local importance, with provisions for expiration once the special obligation bonds for these projects are retired. It also stipulates 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 suspended during this period. The bill repeals several existing statutes related to these tax provisions, indicating a significant restructuring of tax revenue management and allocation concerning highway funding and redevelopment initiatives. 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