The Kansas Property Tax Freedom Act of 2026 aims to phase out property taxation in the state, with a complete prohibition on property taxes starting in 2028. For the tax years 2026 and 2027, taxing subdivisions will be limited to certifying mill levies at 50% and 25% of their 2025 levels, respectively. The act also establishes a property tax freedom reserve fund to provide revenue replacement grants to taxing subdivisions for the loss of property tax revenue due to these limitations. Additionally, the act maintains existing payments in lieu of taxes (PILOT) for renewable energy facilities and introduces a Kansas fair share purchase surcharge on retail purchases to help fund the transition.

The Kansas fair share purchase surcharge will be implemented starting January 1, 2027, with a flat fee for purchases over $20 and a percentage for those under that amount. Revenue from this surcharge will be distributed to school districts, counties, cities, and the state general fund, among others. The act also allows municipalities to issue general obligation bonds for capital improvements, contingent upon voter approval, and establishes a mechanism for local add-on surcharges to fund debt service. Furthermore, any surplus in the property tax freedom reserve fund exceeding $500 million will be rebated to qualified Kansas resident individual taxpayers as a "freedom dividend."