Session of 2000
By Committee on Taxation

  9             AN  ACT relating to income taxation; concerning the administration
10             thereof; amending K.S.A. 79-3221, 79-32,105 and 79-3637 and re-
11             pealing the existing sections.
13       Be it enacted by the Legislature of the State of Kansas:
14             Section  1. K.S.A. 79-3221 is hereby amended to read as follows: 79-
15       3221. (a) All returns required by this act shall be made as nearly as prac-
16       tical in the same form as the corresponding form of income tax return by
17       the United States.
18             (b) All returns shall be filed in the office of the director of taxation
19       on or before the 15th day of the fourth month following the close of the
20       taxable year, except as provided in subsection (c) hereof. Tentative returns
21       may be filed before the close of the taxable year and the estimated tax
22       computed on such return, paid, but no interest will be paid on any over-
23       payment of tax liability, computed on such tentative return.
24             (c) The director of taxation may grant a reasonable extension of time
25       for filing returns in accordance with rules and regulations of the secretary
26       of revenue. Whenever any such extension of time to file is requested by
27       a taxpayer and granted by the director with respect to any tax year com-
28       mencing after December 31, 1992, no penalty authorized by K.S.A. 79-
29       3228, and amendments thereto, shall be imposed if 90% of the liability
30       is paid on or before the original due date.
31             (d) In the case of an individual serving in the armed forces of the
32       United States, or serving in support of such armed forces, in an area
33       designated by the president of the United States by executive order as a
34       "combat zone" as defined under 26 U.S.C. 112 at any time during the
35       period designated by the president by executive order as the period of
36       combatant activities in such zone for the purposes of such section, or
37       hospitalized as a result of injury received or sickness incurred while serv-
38       ing in such an area during such time, the period of service in such area,
39       plus the period of continuous qualified hospitalization attributable to such
40       injury or sickness, and the next 180 days thereafter, shall be disregarded
41       in determining, under article 32 of chapter 79 of the Kansas Statutes
42       Annotated, in respect of any tax liability (including any interest, penalty,
43       additional amount, or addition to the tax) of such individual:


  1             (1) Whether any of the following acts was performed within the time
  2       prescribed therefor: (A) Filing any return of income tax; (B) payment of
  3       any income tax or installment thereof; (C) filing a notice of appeal with
  4       the director of taxation or the board of tax appeals for redetermination
  5       of a deficiency or for a review of a decision rendered by either the director
  6       or the board of tax appeals; (D) allowance of a credit or refund of any
  7       income tax; (E) filing a claim for credit or refund of any income tax; (F)
  8       bringing suit upon any such claim for credit or refund; (G) assessment of
  9       any income tax; (H) giving or making any notice or demand for the pay-
10       ment of any income tax, or with respect to any liability to the state of
11       Kansas in respect of any income tax; (I) collection, by the director of
12       taxation or his or her agent, by warrant, levy or otherwise, of the amount
13       of any liability in respect to any income tax; (J) bringing suit by the state
14       of Kansas, or any officer on its behalf, in respect to any liability in respect
15       of any income tax; and (K) any other act required or permitted under the
16       Kansas income tax act specified in rules and regulations adopted by the
17       secretary of revenue under this section;
18             (2) The amount of any credit or refund.
19             (e)  (1) Subsection (d) shall not apply for purposes of determining the
20       amount of interest on any overpayment of tax.
21             (2) If an individual is entitled to the benefits of subsection (d) with
22       respect to any return and such return is timely filed (determined after
23       the application of such subsection), subsections (e)(5) and (e)(7) of K.S.A.
24       79-32,105, and amendments thereto, shall not apply.
25             (f) The provisions of subsection (d) and the subsequent subsections
26       of this section shall apply to the spouse of any individual entitled to the
27       benefits of subsection (d). Except in the case of the combat zone desig-
28       nated for purposes of the Vietnam conflict, the preceding sentence shall
29       not cause subsection (d) and the subsequent subsections of this section
30       to apply for any spouse for any taxable year beginning more than two
31       years after the date designated under 26 U.S.C. 112 as the date of ter-
32       mination of combatant activities in a combat zone.
33             (g) The period of service in the area referred to in subsection (d) shall
34       include the period during which an individual entitled to benefits under
35       subsection (d) is in a missing status, within the meaning of 26 U.S.C.
36       6013(f)(3).
37             (h)  (1) Notwithstanding the provisions of subsection (d), any action
38       or proceeding authorized by K.S.A. 79-3229, and amendments thereto,
39       as well as any other action or proceeding authorized by law in connection
40       therewith, may be taken, begun or prosecuted. In any other case in which
41       the secretary determines that collection of the amount of any assessment
42       would be jeopardized by delay, the provisions of subsection (d) shall not
43       operate to stay collection of such amount by levy or otherwise as author-


  1       ized by law. There shall be excluded from any amount assessed or col-
  2       lected pursuant to this subsection the amount of interest, penalty, addi-
  3       tional amount, and addition to the tax, if any, in respect of the period
  4       disregarded under subsection (d). In any case to which this paragraph
  5       relates, if the secretary is required to give any notice to or make any
  6       demand upon any person, such requirement shall be deemed to be sat-
  7       isfied if the notice or demand is prepared and signed, in any case in which
  8       the address of such person last known to the secretary is in an area for
  9       which United States post offices under instructions of the postmaster
10       general are not, by reason of the combatant activities, accepting mail for
11       delivery at the time the notice or demand is signed. In such case the
12       notice or demand shall be deemed to have been given or made upon the
13       date it is signed.
14             (2) The assessment or collection of any tax under the provisions of
15       article 32 of chapter 79 of the Kansas Statutes Annotated, or any action
16       or proceeding by or on behalf of the state in connection therewith, may
17       be made, taken, begun or prosecuted in accordance with law, without
18       regard to the provisions of subsection (d), unless prior to such assessment,
19       collection, action or proceeding it is ascertained that the person con-
20       cerned is entitled to the benefits of subsection (d).
21             (i)  (1) Any individual who performed Desert Shield services (and the
22       spouse of such individual) shall be entitled to the benefits of subsection
23       (d) and the subsequent subsections of this section in the same manner as
24       if such services were services referred to in subsection (d).
25             (2) For purposes of this subsection, the term "Desert Shield services"
26       means any services in the armed forces of the United States or in support
27       of such armed forces if:
28             (A) Such services are performed in the area designated by the pres-
29       ident as the "Persian Gulf Desert Shield area", and
30             (B) such services are performed during the period beginning on Au-
31       gust 2, 1990, and ending on the date on which any portion of the area
32       referred to in subparagraph (A) is designated by the president as a combat
33       zone pursuant to 26 U.S.C. 112.
34             (j) For purposes of subsection (d), the term "qualified hospitaliza-
35       tion" means:
36             (1) Any hospitalization outside the United States, and
37             (2) any hospitalization inside the United States, except that not more
38       than five years of hospitalization may be taken into account under this
39       paragraph. This paragraph shall not apply for purposes of applying sub-
40       section (d) and the subsequent subsections of this section with respect to
41       the spouse of an individual entitled to the benefits of subsection (d).
42             Sec.  2. K.S.A. 79-32,105 is hereby amended to read as follows: 79-
43       32,105. (a) The director shall pay to the treasurer of the state daily the


  1       entire amount collected during the preceding day, under the provisions
  2       of this act and from the income tax imposed upon individuals, corpora-
  3       tions, estates or trusts pursuant to the "Kansas income tax act" less
  4       amounts withheld as provided in subsection (b) and any amounts credited
  5       to the IMPACT program repayment fund or the IMPACT program serv-
  6       ices fund under K.S.A. 74-50,107 and amendments thereto, which
  7       amounts shall be credited to the state general fund.
  8             (b) A revolving fund, designated as "income tax refund fund" not to
  9       exceed $4,000,000 shall be set apart and maintained by the director from
10       income tax collections, withholding tax collections, and estimated tax col-
11       lections and held by the state treasurer for prompt payment of all income
12       tax refunds and for the payment of interest as provided in subsection (e).
13       The fund shall be in such amount, within the limit set by this section, as
14       the director determines is necessary to meet current refunding require-
15       ments under this act.
16             (c) If the director discovers from the examination of the return, or
17       upon claim duly filed by the taxpayer or upon final judgment of the court
18       that the income tax, withholding tax, declaration of estimated tax or any
19       penalty or interest paid by or credited to any taxpayer is in excess of the
20       amount legally due, the director shall certify to the director of accounts
21       and reports the name of the taxpayer, the amount of refund and such
22       other information as the director may require. Upon receipt of such cer-
23       tification the director of accounts and reports shall issue a warrant on the
24       state treasurer for the payment to the taxpayer out of the fund provided
25       in subsection (b), except that no refund shall be made for a sum less than
26       $5, but such amount may be claimed by the taxpayer as a credit against
27       the taxpayer's tax liability in the taxpayer's next succeeding taxable year.
28             (d) When a resident taxpayer dies, and the director determines that
29       a refund is due the claimant not in excess of $100, the director shall certify
30       to the director of accounts and reports the name and address of the
31       claimant entitled to the refund and the amount of the refund. A refund
32       may be made upon a claim duly made on behalf of the estate of the
33       deceased or in the absence of any such claim upon a claim by a surviving
34       spouse and if none upon the claim by any heir at law. Upon receipt of
35       such certification the director of accounts and reports shall issue a warrant
36       on the state treasurer for the payment to the claimant out of the fund
37       provided in subsection (b).
38             (e) Interest shall be allowed and paid at the rate of 12% per annum
39       upon any overpayment of the income tax imposed upon individuals, cor-
40       porations, estates or trusts pursuant to the Kansas income tax act for any
41       period prior to January 1, 1995, 6% per annum for the period commenc-
42       ing on January 1, 1995, and ending on December 31, 1997, and at the
43       rate prescribed and determined pursuant to K.S.A. 79-2968, and amend-


  1       ments thereto, for any period thereafter.
  2             For the purposes of this subsection:
  3             (1) Any return filed before the last day prescribed for the filing
  4       thereof shall be considered as filed on such last day, determined without
  5       regard to any extension of time granted the taxpayer;
  6             (2) any tax paid by the taxpayer before the last day prescribed for its
  7       payment, any income tax withheld from the taxpayer during any calendar
  8       year and any amount paid by the taxpayer as estimated income tax for a
  9       taxable year shall be deemed to have been paid on the last day prescribed
10       for filing the return for the taxable year to which such amount constitutes
11       a credit or payment, determined without regard to any extension of time
12       granted the taxpayer;
13             (3) if any overpayment of tax results from a carryback of a net oper-
14       ating loss or net capital loss, such overpayment shall be deemed not to
15       have been made prior to the close of the taxable year in which such net
16       operating loss or net capital loss arises. For purposes of this paragraph,
17       the return for the loss year shall not be deemed to be filed before claim
18       for such overpayment is filed;
19             (4) in the case of a credit, interest shall be allowed and paid from the
20       date of the overpayment to the due date of the amount against which the
21       credit is taken, except that if any overpayment of income tax is claimed
22       as a credit against estimated tax for the succeeding taxable year, such
23       amount shall be considered as a payment of the income tax for the suc-
24       ceeding taxable year, whether or not claimed as a credit in the return of
25       estimated tax for such succeeding taxable year, and no interest shall be
26       allowed or paid in such overpayment for the taxable year in which the
27       overpayment arises;
28             (5) in the case of a tax return which is filed after the last date pre-
29       scribed for filing such return, determined with regard to extensions, no
30       interest shall be allowed or paid for any period before the date on which
31       the return is filed;
32             (6) in the case of a refund, including a refund made pursuant to an
33       amended return, interest shall be allowed and paid from the date of the
34       overpayment to a date preceding the date of the refund check by not
35       more than 30 days, as determined by the director, whether or not such
36       refund check is accepted by the taxpayer after tender of such check to
37       the taxpayer, but acceptance of such check shall be without prejudice to
38       any right of the taxpayer to claim any additional overpayment and interest
39       thereon; and
40             (7) if any overpayment is refunded, including a refund made pursuant
41       to an amended return, within two months after the last date prescribed,
42       or permitted by extension of time, for filing the original return of such
43       tax, or within two months after the original return was filed, whichever


  1       is later, no interest shall be allowed or paid. For the purposes of this
  2       section, an overpayment shall be deemed to have been refunded at the
  3       time the refund check in the amount of the overpayment, plus any interest
  4       due thereon, is deposited in the United States mail.
  5             Sec.  3. K.S.A. 79-3637 is hereby amended to read as follows: 79-
  6       3637. Every claimant for the refund of taxes under the provisions of
  7       K.S.A. 79-3620 and 79-3632 to 79-3639 shall may be required to supply
  8       to the division in support of a claim, reasonable proof of age or disability,
  9       and household income. A claim alleging disability shall may be supported
10       by a report of the examining physician of the claimant with a statement
11       or certificate that the applicant has a disability within the meaning of
12       subsection (f) of K.S.A. 79-3633. 
13       Sec.  4. K.S.A. 79-3221, 79-32,105 and 79-3637 are hereby repealed.
14        Sec.  5. This act shall take effect and be in force from and after its
15       publication in the statute book.