SESSION OF 2019
SUPPLEMENTAL NOTE ON SENATE BILL NO. 104
As Amended by Senate Committee of the Whole

Brief*
SB 104, as amended, would enact the Kansas Taxpayer
Protection Act (Taxpayer Protection Act), enact the Golden
Years Homestead Property Tax Freeze Act (Tax Freeze Act),
allow disabled veteran renters to claim the property tax
refunds under the current Homestead Property Tax Refund
Act (Homestead), and allow individual income taxpayers to
claim the expense deduction.

Kansas Taxpayer Protection Act
The bill would require paid tax return preparers to sign
any income tax return prepared by or substantially prepared
by the preparer and to include the preparer’s federal preparer
tax identification number on any such return. Any failure to do
so would subject the preparer to a civil penalty of $50 per
return with a maximum of $25,000 in civil penalties per
preparer per year. Any civil penalties assessed could be
appealed pursuant to the Kansas Administrative Procedure
Act. Any penalties collected would be deposited in the State
General Fund.
The bill would authorize the Secretary of Revenue
(Secretary) to enjoin any person from acting as a paid tax
preparer by seeking a temporary or permanent order from a
court of competent jurisdiction enjoining such conduct. Under
the bill, an injunction could be issued by a court if the
preparer has engaged in any of the following conduct:
____________________
*Supplemental notes are prepared by the Legislative Research
Department and do not express legislative intent. The supplemental
note and fiscal note for this bill may be accessed on the Internet at
http://www.kslegislature.org
 ● Prepared a return that understates the taxpayer’s
liability due to an “unreasonable position,” as that
term is defined in the Internal Revenue Code;
● Prepared a return that understates the taxpayer’s
liability due to “willful or reckless conduct,” as that
term is defined in the Internal Revenue Code;
● Fails to, when required, furnish a signed copy of
the return including the preparer’s federal preparer
tax identification number, retain a copy of the
return, or be diligent in determining eligibility for tax
benefits;
● Negotiates a check issued to the taxpayer by the
Kansas Department of Revenue without the
permission of the taxpayer;
● Engages in any conduct subject to any criminal
penalty provided for in Chapter 79 of the Kansas
Statutes Annotated or amendments thereto;
● Misrepresents the preparer’s education,
experience, or eligibility to practice tax preparation;
● Guarantees the payment of any tax refund or the
allowance of any tax credit; or
● Engages in any other fraudulent or deceptive
conduct that substantially interferes with proper
administration of Kansas tax laws.
The bill would allow the Secretary to seek the assistance
of the Attorney General or the Attorney General’s designee in
pursuing such injunctions, and the Secretary would be
required to publish an annual report concerning such
injunctions on the website of the Kansas Department of
Revenue.


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 The bill would provide that any person, whether or not a
resident of Kansas, submits to the jurisdiction of the courts of
the State of Kansas for purposes of such injunctions by
engaging in any conduct that could give rise to a cause of
action under the Taxpayer Protection Act. The bill would
provide that legal actions brought under the Taxpayer
Protection Act would be brought in the district court of
Shawnee County. The Secretary would be permitted to enter
into consent judgments with respect to violations of the
Taxpayer Protection Act in lieu of actions seeking injunctions
under the Taxpayer Protection Act.
The bill would authorize the Secretary to promulgate
rules and regulations necessary to carry out the provisions of
the Taxpayer Protection Act.

Golden Years Homestead Property Tax Freeze Act
The bill would establish a new property tax circuit
breaker refund program (refund program) beginning in tax
year 2019 that would provide refunds of a portion of property
taxes paid on qualifying residential homestead property
equivalent to the total property tax increase over the base
year. For taxpayers qualifying at the time of enactment, tax
year 2018 liability would be deemed as the base year. For all
other taxpayers, the base year would be the first year in
which they are eligible to claim the refund provided by the Tax
Freeze Act.
In order to qualify for the refund program, the bill would
require taxpayers to have a household income of less than
$50,000 and be 65 years of age or older or a disabled
veteran. The value of the qualifying residential homestead
property also would have to be less than $350,000. Qualifying
taxpayers would be ineligible to claim a Golden Years refund
if they are seeking to claim either of the two existing circuit
breaker programs: the Homestead Property Tax Refund or
the Selective Assistance for Effective Senior Relief (SAFESR)
Refund. The bill would allow surviving spouses of qualified

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individuals to continue in the Golden Years program unless
they subsequently remarry. Golden Years claims would be
required to be filed by April 15, relative to refund amounts
determined by the previous property tax year’s liability.
Under the bill, disabled veterans would include Kansas
residents honorably discharged from active service in any
branch of the armed forces of the United States or Kansas
National Guard who have been determined to have a 50
percent permanent disability sustained while on active duty.
Beginning with the second year of the program, the
Director of Taxation would be required to send county clerks
electronic records by October 15 of each year containing
names of eligible claimants who have received refunds under
the Tax Freeze Act for the prior year.
Under the bill, the Director of Taxation would have
authority to apply refunds to any state tax liability of the
qualified individual or other member of the household.
Remaining refunds would first be applied to any delinquent
property taxes on the homesteads and then to any current
property tax liability.
The bill would grant the Secretary broad authority to
adopt rules and regulations necessary for administration of
the Tax Freeze Act.

Disabled Veteran Renters
The bill would also allow disabled veterans who are
renters to claim refunds under the current Homestead
program under the statutory presumption that 15.0 percent of
qualifying rental payments would be deemed the equivalent
of property taxes paid for purposes of that program. (Note:
Legislation enacted in 2012 had removed all renters from the
Homestead program.)


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Expense Deduction
The bill would allow individual income taxpayers to begin
claiming the expense deduction (provided by KSA 2018
Supp. 79-32,143a) for the costs of placing certain tangible
property and computer software into service in the state
beginning in tax year 2019.

Background

SB 104
SB 104 was introduced by the Senate Select Committee
on Federal Tax Code Implementation at the request of
Senator Longbine.
At the Senate Committee on Assessment and Taxation
hearing, a representative of H&R Block testified in support of
the bill. No other testimony was provided.
The Senate Committee amended SB 104 to clarify the
provisions of the bill would not apply to individuals licensed as
Certified Public Accountants (CPAs). H&R Block had
recommended this clarification, noting CPAs are regulated by
the Kansas Board of Accountancy.
The Senate Committee of the Whole amended SB 104
to include the provisions of SB 91 regarding the Tax Freeze
Act and disabled veteran renters; and to include the
provisions related to the expense deduction. The relevant
background for SB 91 is included below.

SB 91 (Tax Freeze Act, Disabled Veteran Renters)
SB 91 was introduced by Senators Holland,
Baumgardner, Doll, Faust-Goudeau, Haley, Hawk, Lynn,
Pettey, and Sykes.

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 During the Senate Committee on Assessment and
Taxation hearing on February 14, Senator Holland appeared
as the lead proponent. Other proponents included Senators
Baumgardner and Faust-Goudeau, representatives of the
Kansas Association of Realtors and the Kansas Silver Haired
Legislature, and two private citizens. The Sedgwick County
clerk submitted written-only testimony in opposition to the bill.
Written-only neutral testimony was submitted by
representatives of the AARP, Johnson County Board of
County Commissioners, Kansas Association of Counties, and
the League of Kansas Municipalities.
SB 91, as introduced, would have prevented taxpayers
with homesteads subject to mortgages or other security
interests from qualifying for refunds under the Golden Years
program and restored the ability of all renters otherwise
qualified under the income and demographic tests to claim
traditional Homestead refunds. On February 25, the Senate
Committee amended the bill to remove the prohibition against
property subject to liens being eligible for Golden Years
refunds and to limit the restoration of Homestead refunds to
only those renters who are disabled veterans.

Fiscal Information
SB 104, as Introduced
According to the fiscal note prepared by the Division of
the Budget on SB 104, as introduced, the Department of
Revenue indicates the fines provided for by the bill have the
potential to increase State General Fund revenues; however,
the Department was unable to estimate the amount of such
increase. The costs associated with enactment of the bill are
estimated to be negligible and could be absorbed within
existing resources. The Office of the Attorney General
indicates the Taxpayer Protection Act has the potential to
increase litigation costs beginning in FY 2020, but did not
estimate the amount of such an increase.

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Senate Committee of the Whole Amendments
A representative of the Department of Revenue stated
the Tax Freeze Act, disabled veteran renters, and expense
deduction provisions would be expected to have the following
impact on State General Fund receipts.
(DOLLARS IN MILLIONS)
FY 2020 FY 2021 FY 2022
Golden Years Refunds $ (4.5) $ (9.1) $ (13.6)
Disabled Veteran (0.5) (0.5) (0.5)
Renters Refunds
Expense Deductions (9.0) (9.0) (9.0)
Total $ (14.0) $ (18.6) $ (23.1)
99.0 99.0 99.0
Note: Totals may not add due to rounding.
Administrative costs associated with Senate Committee
of the Whole amendments to SB 104 were not immediately
available.
Any fiscal effect associated with enactment of SB 104 is
not reflected in The FY 2020 Governor’s Budget Report.


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Statutes affected:
{As Amended by Senate Committee of the Whole}: 79-4501, 79-4502, 79-4508, 79-4509, 79-4511, 79-4522, 79-32