Property, sales and income tax mega-bundle approved by Kansas governor

TOPEKA — A Kansas bill signed into law Thursday spans the gamut of tax policy, packaging more than two dozen measures amending property, sales and income tax laws.

The massive House Bill 2239, backed by the Legislature and Gov. Laura Kelly, included provisions from 29 different bills cutting taxes and will hack nearly $91 million from state tax revenue in the first year. The largest cost is the taxpayer-assessed 20 mill levy toward supporting K-12 public education.

In approving the changes to state tax laws, Kelly said she felt the opportunity to provide relief for Kansans was now, while the state experiences its first budget surplus in decades.

“Our fiscal responsibility has put Kansas back on track,” Kelly said. “We’ve been able to fully fund our schools, fix our roads and bridges, balance the budget and cut property taxes, providing relief for Kansans.”

The House voted 103-10 to adopt the bill, while no senator opposed the measure. Before negotiations between the two chambers, House tax committee leaders said the bill drained close to $500 million.

In 2024, the package will sap $99.8 million in state tax revenue and an additional $119.6 million in 2025.

The changes increase the residential property tax exemption, provide homestead property tax refunds to eligible taxpayers and will broaden the property tax reduction authority of county commissioners for property destroyed by a disaster.

Rep. Adam Smith, R-Weskan, said the measure contains many noncontroversial measures so he was excited to see the governor approve it. In particular, he applauded the property tax relief provided and the homestead exemption for qualifying elderly Kansans.

“A lot of senior citizens on fixed lower incomes, are faced with increasing property values and property tax statements every year,” Smith said. “This essentially, once they hit the qualifying terms for the program, freezes their property tax bill, and that’s something they can count on for for the rest of their years is that the property taxes that are due will never be going up.”

Although some legislators expressed concern about passing so-called mega bill legislation, both parties found common ground in the bill.

The law provides tax credits for school and classroom supplies purchased by teachers and graduates of aerospace and aviation-related educational programs and employers of graduates. It also provides additional personal income tax exemptions for disabled veterans.

“I am very pleased Kansas taxpayers will benefit from the governor’s election year conversion,” said Senate President Ty Masterson

Additional provisions create a sales tax exemption for the purchase of supplies to reconstruct or repair fencing for agricultural land damaged or destroyed by a natural disaster, a highly sought-after bill for farmers and ranchers impacted by recent wildfires.

While Kelly said these tax cuts would provide needed relief for Kansans, she reiterated the need for an elimination of the food sales tax. House Bill 2106, which wasn’t acted upon before the Legislature adjourned for a three-week break, would phase out the state sales tax by 2025.

“We have the opportunity to help Kansans who are feeling the impact of pandemic-induced inflation,” Kelly said. With the largest budget surplus in decades, we can do both – provide property tax relief and finally eliminate the state sales tax on food.”