Session of 1999
HOUSE BILL No. 2242
By Representatives Landwehr and Aurand and Ballard, Boston, Comp-
ton, Dahl, Dean, Farmer, Flower, Franklin, Freeborn, Geringer, Gil-
bert, Glasscock, Gregory, Haley, Hayzlett, Helgerson, Henderson,
Henry, Horst, Howell, Humerickhouse, Hutchins, Jennison, Phill
Kline, Lloyd, M. Long, P. Long, Mason, Mayans, Mays, McClure,
McCreary, McKechnie, Mollenkamp, Morrison, Myers, Neufeld,
Nichols, O'Connor, O'Neal, Osborne, Palmer, Pauls, J. Peterson,
Phelps, Pottorff, Powell, Reardon, Ruff, Showalter, Shultz, Spangler,
Tanner, Thimesch, Vickrey, Vining and Wagle
17 AN ACT relating to income taxation; providing credits therefrom for de-
18 pendent education expenses and teaching aid contributions; amending
19 K.S.A. 1998 Supp. 79-32,117 and repealing the existing section.
21 Be it enacted by the Legislature of the State of Kansas:
22 New Section 1. For all taxable years commencing after December
23 31, 1998, there shall be allowed as a credit against the tax liability imposed
24 under the Kansas income tax act upon an individual who is certificated
25 to instruct and educate students of grades kindergarten through 12 in an
26 accredited school, whether public or otherwise, an amount, not to exceed
27 $500, equal to the purchase costs of equipment, materials or other teach-
28 ing aids for use in the classroom to assist in the education of the students
29 of such individual. If the amount of such tax credit exceeds the individual's
30 income tax liability for the appropriate taxable year, such excess amount
31 shall be refunded.
32 New Sec. 2. For all taxable years commencing after December 31,
33 1998, there shall be allowed as a credit against the tax liability imposed
34 under the Kansas income tax act upon an individual amounts incurred
35 during the taxable year for education expenses for all dependents of such
36 individual attending an elementary or secondary school which is located
37 in Kansas which adheres to the provisions of the federal civil rights act
38 of 1964 and the Kansas act against discrimination, and attendance at
39 which satisfies the requirements of K.S.A. 72-1111, and amendments
40 thereto. As used in this section: "Education expenses" include, but are
41 not limited to, textbooks and other instructional materials and equipment
42 and computer hardware and software. The amount of such credit shall
43 be 25% of the amounts paid for education expenses in excess of $250,
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1 but shall not exceed $500 expended for all dependents in any taxable
2 year. If the amount of such tax credit exceeds the individual's income tax
3 liability for the appropriate taxable year, such excess amount shall be
5 Sec. 3. K.S.A. 1998 Supp. 79-32,117 is hereby amended to read as
6 follows: 79-32,117. (a) The Kansas adjusted gross income of an individual
7 means such individual's federal adjusted gross income for the taxable year,
8 with the modifications specified in this section.
9 (b) There shall be added to federal adjusted gross income:
10 (i) Interest income less any related expenses directly incurred in the
11 purchase of state or political subdivision obligations, to the extent that
12 the same is not included in federal adjusted gross income, on obligations
13 of any state or political subdivision thereof, but to the extent that interest
14 income on obligations of this state or a political subdivision thereof issued
15 prior to January 1, 1988, is specifically exempt from income tax under the
16 laws of this state authorizing the issuance of such obligations, it shall be
17 excluded from computation of Kansas adjusted gross income whether or
18 not included in federal adjusted gross income. Interest income on obli-
19 gations of this state or a political subdivision thereof issued after Decem-
20 ber 31, 1987, shall be excluded from computation of Kansas adjusted
21 gross income whether or not included in federal adjusted gross income.
22 (ii) Taxes on or measured by income or fees or payments in lieu of
23 income taxes imposed by this state or any other taxing jurisdiction to the
24 extent deductible in determining federal adjusted gross income and not
25 credited against federal income tax. This paragraph shall not apply to taxes
26 imposed under the provisions of K.S.A. 79-1107 or 79-1108, and amend-
27 ments thereto, for privilege tax year 1995, and all such years thereafter.
28 (iii) The federal net operating loss deduction.
29 (iv) Federal income tax refunds received by the taxpayer if the de-
30 duction of the taxes being refunded resulted in a tax benefit for Kansas
31 income tax purposes during a prior taxable year. Such refunds shall be
32 included in income in the year actually received regardless of the method
33 of accounting used by the taxpayer. For purposes hereof, a tax benefit
34 shall be deemed to have resulted if the amount of the tax had been de-
35 ducted in determining income subject to a Kansas income tax for a prior
36 year regardless of the rate of taxation applied in such prior year to the
37 Kansas taxable income, but only that portion of the refund shall be in-
38 cluded as bears the same proportion to the total refund received as the
39 federal taxes deducted in the year to which such refund is attributable
40 bears to the total federal income taxes paid for such year. For purposes
41 of the foregoing sentence, federal taxes shall be considered to have been
42 deducted only to the extent such deduction does not reduce Kansas tax-
43 able income below zero.
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1 (v) The amount of any depreciation deduction or business expense
2 deduction claimed on the taxpayer's federal income tax return for any
3 capital expenditure in making any building or facility accessible to the
4 handicapped, for which expenditure the taxpayer claimed the credit al-
5 lowed by K.S.A. 79-32,177, and amendments thereto.
6 (vi) Any amount of designated employee contributions picked up by
7 an employer pursuant to K.S.A. 12-5005, 20-2603, 74-4919 and 74-4965,
8 and amendments to such sections.
9 (vii) The amount of any charitable contribution made to the extent
10 the same is claimed as the basis for the credit allowed pursuant to K.S.A.
11 79-32,196, and amendments thereto.
12 (viii) The amount of any costs incurred for improvements to a swine
13 facility, claimed for deduction in determining federal adjusted gross in-
14 come, to the extent the same is claimed as the basis for any credit allowed
15 pursuant to K.S.A. 1998 Supp. 79-32,204 and amendments thereto.
16 (ix) The amount of any ad valorem taxes and assessments paid and
17 the amount of any costs incurred for habitat management or construction
18 and maintenance of improvements on real property, claimed for deduc-
19 tion in determining federal adjusted gross income, to the extent the same
20 is claimed as the basis for any credit allowed pursuant to K.S.A. 79-32,203
21 and amendments thereto.
22 (x) The amount of any contributions made to an elementary or sec-
23 ondary school to the extent the same is claimed as the basis for the credit
24 allowed pursuant to section 1.
25 (c) There shall be subtracted from federal adjusted gross income:
26 (i) Interest or dividend income on obligations or securities of any
27 authority, commission or instrumentality of the United States and its pos-
28 sessions less any related expenses directly incurred in the purchase of
29 such obligations or securities, to the extent included in federal adjusted
30 gross income but exempt from state income taxes under the laws of the
31 United States.
32 (ii) Any amounts received which are included in federal adjusted
33 gross income but which are specifically exempt from Kansas income tax-
34 ation under the laws of the state of Kansas.
35 (iii) The portion of any gain or loss from the sale or other disposition
36 of property having a higher adjusted basis for Kansas income tax purposes
37 than for federal income tax purposes on the date such property was sold
38 or disposed of in a transaction in which gain or loss was recognized for
39 purposes of federal income tax that does not exceed such difference in
40 basis, but if a gain is considered a long-term capital gain for federal in-
41 come tax purposes, the modification shall be limited to that portion of
42 such gain which is included in federal adjusted gross income.
43 (iv) The amount necessary to prevent the taxation under this act of
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1 any annuity or other amount of income or gain which was properly in-
2 cluded in income or gain and was taxed under the laws of this state for a
3 taxable year prior to the effective date of this act, as amended, to the
4 taxpayer, or to a decedent by reason of whose death the taxpayer acquired
5 the right to receive the income or gain, or to a trust or estate from which
6 the taxpayer received the income or gain.
7 (v) The amount of any refund or credit for overpayment of taxes on
8 or measured by income or fees or payments in lieu of income taxes im-
9 posed by this state, or any taxing jurisdiction, to the extent included in
10 gross income for federal income tax purposes.
11 (vi) Accumulation distributions received by a taxpayer as a beneficiary
12 of a trust to the extent that the same are included in federal adjusted
13 gross income.
14 (vii) Amounts received as annuities under the federal civil service
15 retirement system from the civil service retirement and disability fund
16 and other amounts received as retirement benefits in whatever form
17 which were earned for being employed by the federal government or for
18 service in the armed forces of the United States.
19 (viii) Amounts received by retired railroad employees as a supple-
20 mental annuity under the provisions of 45 U.S.C. 228b (a) and 228c (a)(1)
21 et seq.
22 (ix) Amounts received by retired employees of a city and by retired
23 employees of any board of such city as retirement allowances pursuant to
24 K.S.A. 13-14,106, and amendments thereto, or pursuant to any charter
25 ordinance exempting a city from the provisions of K.S.A. 13-14,106, and
26 amendments thereto.
27 (x) For taxable years beginning after December 31, 1976, the amount
28 of the federal tentative jobs tax credit disallowance under the provisions
29 of 26 U.S.C. 280 C. For taxable years ending after December 31, 1978,
30 the amount of the targeted jobs tax credit and work incentive credit dis-
31 allowances under 26 U.S.C. 280 C.
32 (xi) For taxable years beginning after December 31, 1986, dividend
33 income on stock issued by Kansas Venture Capital, Inc.
34 (xii) For taxable years beginning after December 31, 1989, amounts
35 received by retired employees of a board of public utilities as pension and
36 retirement benefits pursuant to K.S.A. 13-1246, 13-1246a and 13-1249
37 and amendments thereto.
38 (xiii) For taxable years beginning after December 31, 1993, the
39 amount of income earned on contributions deposited to an individual
40 development account under K.S.A. 79-32,117h, and amendments thereto.
41 (xiv) For all taxable years commencing after December 31, 1996, that
42 portion of any income of a bank organized under the laws of this state or
43 any other state, a national banking association organized under the laws
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1 of the United States, an association organized under the savings and loan
2 code of this state or any other state, or a federal savings association or-
3 ganized under the laws of the United States, for which an election as an
4 S corporation under subchapter S of the federal internal revenue code is
5 in effect, which accrues to the taxpayer who is a stockholder of such
6 corporation and which is not distributed to the stockholders as dividends
7 of the corporation.
8 (d) There shall be added to or subtracted from federal adjusted gross
9 income the taxpayer's share, as beneficiary of an estate or trust, of the
10 Kansas fiduciary adjustment determined under K.S.A. 79-32,135, and
11 amendments thereto.
12 (e) The amount of modifications required to be made under this sec-
13 tion by a partner which relates to items of income, gain, loss, deduction
14 or credit of a partnership shall be determined under K.S.A. 79-32,131,
15 and amendments thereto, to the extent that such items affect federal
16 adjusted gross income of the partner.
17 Sec. 4. K.S.A. 1998 Supp. 79-32,117 is hereby repealed.
18 Sec. 5. This act shall take effect and be in force from and after its
19 publication in the statute book.