The bill amends Kansas sales tax laws to provide a tax exemption for electricity sales delivered to residential premises for noncommercial use, stating that such sales will be exempt from taxation after July 1, 2026. It modifies K.S.A. 12-189a and updates K.S.A. 2025 Supp. 79-3603 to establish a 0% state tax rate on gross receipts from these sales until the expiration date. Additionally, the bill repeals certain sections of K.S.A. 12-189a and K.S.A. 2025 Supp. 79-3606, which previously governed the taxation of electricity and other utilities, aiming to reduce the tax burden on residential consumers and promote the affordability of essential utilities.

Moreover, the bill introduces various amendments to tax exemption laws for nonprofit organizations and contractors, specifying that sales of tangible personal property or services purchased by certain tax-exempt organizations are exempt from sales tax, provided they are used exclusively for their intended purposes. It outlines the requirements for exemption certificates, particularly for contractors working on projects for public or private institutions, and establishes penalties for misuse of these exemptions. The bill also expands the list of eligible organizations and includes provisions for sales tax refunds on exempt transactions that occurred prior to the bill's enactment, ultimately aiming to streamline the exemption process and ensure compliance with tax regulations.

Statutes affected:
As introduced: 12-189a, 79-3603, 79-3606, 79-3603d, 74-50