Update: Kansas Governor Laura Kelly signed the bill into law Friday, June 21, 2024.
TOPEKA—Kansas lawmakers met in a special session today, approving a bill that cuts personal income tax, but does not include a business tax reduction.
The tax cut package reduces income tax rates to 5.2% for married individuals filing together with combined taxable income between $0 to $46,000. Income of $46,001 and above would be taxed at 5.58%.
The slight increase in the standard deduction and an expansion of the personal exemption by more than four times means low-income earners won’t pay any income tax.
“This will move it up for a family of four to $31,000 before they have to pay income taxes,” said Senator Virgil Peck, a Republican from Havana.
The bill also eliminates state taxes on Social Security income.
“This take steps to simplify our code, brings the three brackets to two, gives tax relief to the lower end, no tax on social security, and it does bring property tax relief. The exemption [for residential property] is almost doubling from $42,000 to $75,000,” said Senate President Ty Masterson, a Republican from Andover.
Under the bill, the first $75,000 of residential property valuation will be exempted from the statewide 20-mill levy. Four tax bills passed during the regular legislative session and vetoed by Kansas Governor Laura Kelly had various reductions in the statewide property tax mill-rate. House Speaker Dan Hawkins, a Republican from Wichita, says a mill-rate reduction is first on the agenda when the legislature convenes for the 2025 session.
“Property tax is something that’s truly affecting people greatly,” Hawkins said. “We’re going to have to look at how appraisals work, may have to look at rates, we will come in and do that. This one is a start, but it’s not the end.”
Tom Sawyer, a Democrat from Wichita, and the Ranking Minority member on the House Taxation Committee agreed further property tax reduction should be a top of the agenda next session.
“We’ve got to make property tax a priority. That’s a key thing that’s not in here,” Sawyer said. “We’ll be back here in six months…let’s come back in January and fight for more property tax relief.”
The bill is the result of a compromise negotiated between Masterson, Hawkins, and Governor Kelly, a Democrat.
The Kansas Senate approved the bill 34-4 after Sen. Rob Olson, a Republican from Olathe, called the question to vote on the bill rather than continue debate with the possibility of amendments.
“We’ve had two years to discuss the tax policy that in front of us, to throw something new in would jeopardize the compromise,” Olsen said.
The House approved the bill with a vote of 121-2. Governor Kelly indicates she will sign the bill.
The bill increases the child care tax credit to 50% of the federal allowance. Current law only allows 25% of that number. Food sales tax will be eliminated in January, though tax cut bills that passed during regular session would have eliminated that tax July 1.
Fiscal forecasts indicate the bill will reduce taxes by just under $2 billion over the next five years.
