SESSION OF 2022
SUPPLEMENTAL NOTE ON HOUSE BILL NO. 2394
As Amended by House Committee on Taxation

Brief*
HB 2394, as amended, would increase the Research
and Development Activities Tax Credit from 6.5 percent to
10.0 percent and allow the credit to be claimed by all income
taxpayers (current law limits the credit to corporate income
taxpayers).
The bill would allow for a one-time transfer of the credit
in its entirety by a taxpayer without a current tax liability. The
credit would be transferable to any person and could be
claimed by that person as a credit against their state income
tax liability in the year of the transfer. The transferred credit
would be non-refundable, but could be carried forward until
fully used.
The bill would be effective for tax years commencing
after December 31, 2022.

Background
The bill was introduced by the House Committee on
Taxation at the request of a representative of the Kansas
Department of Commerce.

House Committee on Taxation
In the House Committee hearing on the bill, proponent
testimony was provided by representatives of the Chamber of
____________________
*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
Lawrence, the Greater Topeka Chamber of Commerce, and
PROSOCO. The proponents generally said this bill would
make research and development tax credits applicable to
more types of businesses and would allow for further
innovation and economic growth. Written-only proponent
testimony was provided by representatives of the Greater
Kansas City Chamber of Commerce, the Kansas Department
of Commerce, and the Overland Park Chamber.
No other testimony was provided.
The House Committee amended the bill to make
changes to date references throughout the bill.

Fiscal Information
According to the fiscal note prepared by the Division of
the Budget on the bill, as introduced, the Department of
Revenue (Department) indicated passage of the bill would
decrease State General Fund revenues by $1,020,000 in FY
2022, with similar results for future fiscal years. The
Department also estimated passage of the bill would increase
the number of filers claiming the tax credit by 30.0 percent.
The Department indicated it would need a total of $149,383
from the State General Fund in FY 2022 to implement the bill
and modify the automated tax system, as well as 1.0 new full
-time equivalent position to manage the transferability of the
tax credit and answer questions from taxpayers. The
Department indicated additional expenditures for outside
contract programmer services beyond the Department’s
current budget may be required if the combined effect of
implementing the bill and other enacted legislation exceeds
the Department’s programming resources, or if the time for
implementing the changes is too short. Any fiscal effect
associated with HB 2394 is not reflected in The FY 2022
Governor’s Budget Report.
Research and development activities tax credit


2- 2394


Statutes affected:
As introduced: 79-32
As Amended by House Committee: 79-32