79-32,110c.

934 words·~4 min read·/ks/chapter-79/79-32-24

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79-32,110c. Adjustment of tax rates; modification of income tax and privilege tax rates; calculation and publication of rate reductions by secretary of revenue.

(a)As used in this section:

(1)"Adjusted consumer price ratio" means the fiscal year consumer price index divided by the base year consumer price index.

(2)"Adjusted general revenue fund collections" means actual tax receipt revenues to the state general fund from the Kansas income tax act and the privilege tax imposed upon any national banking association, state bank, trust company or savings and loan association pursuant to article 11 of chapter 79 of the Kansas Statutes Annotated, and amendments thereto.

(3)"Base year revenues" means actual tax receipt revenues to the state general fund for fiscal year 2024 in the amount of $5,969,395,529 from the Kansas income tax act and the privilege tax imposed upon any national banking association, state bank, trust company or savings and loan association pursuant to article 11 of chapter 79 of the Kansas Statutes Annotated, and amendments thereto.

(4)"Base year consumer price index" means a 12-month average of the not seasonally adjusted consumer price index for all urban consumers for fiscal year 2024.

(5)"Excess fiscal year general revenue fund collections" means the positive difference from subtracting the inflation adjusted base year revenues from the adjusted general revenue fund collections from the immediately preceding fiscal year.

(6)"Fiscal year consumer price index" means a 12-month average of the not seasonally adjusted consumer price index for all urban consumers for the immediately preceding fiscal year.

(7)"Inflation adjusted base year revenues" means the base year revenues multiplied by the adjusted consumer price ratio.

(b)Commencing on August 15, 2025, and every August 15 thereafter, the director of the budget, in consultation with the director of legislative research, shall determine whether the total fiscal year adjusted general revenue fund collections from the immediately preceding fiscal year are in excess of the inflation adjusted base year revenues and if the amount of moneys in the budget stabilization fund established pursuant to K.S.A. 75-6706 , and amendments thereto, is equal to or exceeds 15% of the prior fiscal year's state tax receipt revenues to the state general fund. If the total fiscal year adjusted general revenue fund collections from the immediately preceding fiscal year are in excess of the inflation adjusted base year revenues and the amount of moneys in the budget stabilization fund is equal to or exceeds 15% of the prior fiscal year's state tax receipt revenues to the state general fund, the director of the budget shall certify to the secretary of revenue the existence of such excess and the amount of the excess.

(c)In the event that the secretary of revenue certifies that the adjusted general revenue fund collections from the immediately preceding fiscal year are in excess of the inflation adjusted base year revenues and the amount of moneys in the budget stabilization fund is equal to or exceeds 15% of the prior fiscal year's state tax receipt revenues to the state general fund, the secretary shall calculate and publish the income tax and privilege tax rate reduction as a result of the excess. In calculating the income tax rate reduction, the excess fiscal year general revenue fund collections shall be computed that would result in the reduction of the income tax rates pursuant to subsection

(d)in an amount approximately equal to the rate reductions down to the nearest 0.01% to go into effect for the next tax year. In calculating the privilege tax rate reduction pursuant to subsection (d), the reduction shall be a corresponding rate reduction that is equal to the total percentage adjustment to the corporate income tax. Such rate reductions shall remain in effect unless further reduced pursuant to this section. The income tax brackets and taxable income thresholds prescribed in K.S.A. 79-32,110 (a), and amendments thereto, shall be adjusted to reflect the changes in income tax rates.

(d)The secretary shall first compute the reduction of the income tax rates pursuant to K.S.A. 79-32,110 (a), and amendments thereto, that decreases proportionally all tax rates in effect. Once the lower income tax rate is decreased to 4%, there shall be no further reductions to the lower income tax rate and further reductions shall only be applied to reduce the higher income tax rate in effect. Upon the higher income tax rate being decreased to 4%, no further reductions shall occur to K.S.A. 79-32,110 (a), and amendments thereto. The secretary shall then compute decreases to:

(1)The surtax imposed pursuant to K.S.A. 79-32,110 (c), and amendments thereto. The surtax shall be decreased until the combined normal and surtax rates equal 4% that are imposed pursuant to K.S.A. 79-32,110 (c), and amendments thereto. Once the combined normal and surtax rates pursuant to K.S.A. 79-32,110 (c), and amendments thereto, equal 4%, no further reductions shall occur;

(2)the normal tax imposed pursuant to K.S.A. 79-1107 , and amendments thereto. The normal tax shall be decreased until the combined normal and surtax rates equal 2.6% that are imposed pursuant to K.S.A. 79-1107 , and amendments thereto. Once the combined normal and surtax rates pursuant to K.S.A. 79-1107 , and amendments thereto, equal 2.6%, no further reductions shall occur; and

(3)the normal tax imposed pursuant to K.S.A. 79-1108 , and amendments thereto. The normal tax shall be decreased until the combined normal and surtax rates equal 2.62% that are imposed pursuant to K.S.A. 79-1108 , and amendments thereto. Once the combined normal and surtax rates pursuant to K.S.A. 79-1108 , and amendments thereto, equal 2.62%, no further reductions shall occur.