SB 300 — Providing for the apportionment of business income by manufacturers of alcoholic liquor depending on whether the taxpayer is a qualifying Kansas investor or a general manufacturer and removing obsolete reference to global intangible low-taxed income provided for under the federal internal revenue code in determining Kansas adjusted gross income.

(C) The qualifying portion of total business income of an investment funds service corporation shall be determined by multiplying such total business income by a fraction, the numerator of which is the gross receipts from the provision of management, distribution and administration services to or on behalf of an investment company, and the denominator of which is the gross receipts of the investment funds service company.

To the extent an investment funds service corporation has business income that is not qualifying business income, such business income shall be apportioned to this state pursuant to subsection (b)(1).

(D) For tax year 2002, the tax liability of an investment funds service corporation that has elected to apportion its business income pursuant to this paragraph (5) shall be increased by an amount equal to 50% of the difference of the amount of such tax liability if determined pursuant to subsection (b)(1) less the amount of such tax liability determined with regard to this paragraph (5).

(E) When an investment funds service corporation is part of a unitary group, the business income of the unitary group attributable to the investment funds service corporation shall be determined by multiplying the business income of the unitary group by a fraction, the numerator of which is the property factor plus the payroll factor plus the sales factor, and the denominator of which is three.

The property factor is a fraction, the numerator of which is the average value of the investment funds service corporation's real and tangible personal property owned or rented and used during the tax period and the denominator of which is the average value of the unitary group's real SENATE BILL No.

300—page 3 and tangible personal property owned or rented and used during the tax period.

The payroll factor is a fraction, the numerator of which is the total amount paid during the tax period by the investment funds service corporation for compensation, and the denominator of which is the total compensation paid by the unitary group during the tax period.

The sales factor is a fraction, the numerator of which is the total sales of the investment funds service corporation during the tax period, and the denominator of which is the total sales of the unitary group during the tax period.

(F) A taxpayer seeking to make the election available pursuant to subsection (b)(5) this paragraph shall only be eligible to continue to make such election if the taxpayer maintains at least 95% of the Kansas employees in existence at the time the taxpayer first makes such an election.

(6) At the election of a qualifying taxpayer, by multiplying such taxpayer's business income by the sales factor.

The election shall be made by including a statement with the original tax return indicating that the taxpayer elects to apply this apportionment method.

The election may be made only once and must be made on or before the last day of the taxable year during which the investment described in paragraph (A) is placed in service, but not later than December 31, 2009, and it the election shall be effective for the taxable year of the election and the following nine taxable years or for so long as the taxpayer maintains the wage requirements set forth in paragraph (A).

If the qualifying taxpayer is a member of a unitary group of corporations, all other members of the unitary group doing business within this state shall apportion their business income to this state pursuant to subsection (b)(1).

(A) For purposes of this subsection, a qualifying taxpayer is any taxpayer making an investment of $100,000,000 for construction in Kansas of a new business facility identified under the North American industry classification system (NAICS) subsectors of 31-33, as assigned by the secretary of the department of labor, employing 100 or more new employees at such facility after July 1, 2007, and prior to December 31, 2009, and meeting the following requirements for paying such employees higher-than-average wages within the wage region for such facility:

(i) The taxpayer's new Kansas business facility with 500 or fewer full-time equivalent employees will provide an average wage that is above the average wage paid by all Kansas business facilities that share the same assigned NAICS category used to develop wage thresholds and that have reported 500 or fewer employees to the Kansas department of labor on the quarterly wage reports;

(ii) the taxpayer's new Kansas business facility with 500 or fewer full-time equivalent employees is the sole facility within its assigned NAICS category that has reported wages for 500 or fewer employees to the Kansas department of labor on the quarterly wage reports;

(iii) the taxpayer's new Kansas business facility with more than full-time equivalent employees will provide an average wage that is above the average wage paid by all Kansas business facilities that share the same assigned NAICS category used to develop wage thresholds and that have reported more than 500 employees to the Kansas department of labor on the quarterly wage reports;

(iv) the taxpayer's new Kansas business facility with more than full-time equivalent employees is the sole facility within its assigned NAICS category that has reported wages for more than 500 employees to the Kansas department of labor on the quarterly wage reports, in which event it, the taxpayer shall either provide an average wage that is above the average wage paid by all Kansas business SENATE BILL No.

300—page 4 facilities that share the same assigned NAICS category and that have reported wages for 500 or fewer employees to the Kansas department of labor on the quarterly wage reports, or be the sole Kansas business facility within its the taxpayer's assigned NAICS category that has reported wages to the Kansas department of labor on the quarterly wage reports;

(v) the number of NAICS digits to use in developing each set of wage thresholds for comparison purposes shall be determined by the secretary of commerce;

(vi) the composition of wage regions used in connection with each set of wage thresholds shall be determined by the secretary of commerce;

and (vii) alternatively, a taxpayer may wage-qualify its new Kansas business facility if, after excluding the headcount and wages reported on the quarterly wage reports to the Kansas department of labor for employees at that new Kansas business facility who own five percent 5% or more equity in the taxpayer, the average wage calculated for the taxpayer's new Kansas business facility is greater than or equal to 1.5 times the aggregate state-wide average wage paid by industries covered by the employment security law based on data maintained by the secretary of labor.

(B) For the purposes of the wage requirements in paragraph (A), the number of full-time equivalent employees shall be determined by dividing the number of hours worked by part-time employees during the pertinent measurement interval by an amount equal to the corresponding multiple of a 40-hour work week and adding the quotient to the average number of full-time employees.

(C) When the qualifying taxpayer is part of a unitary group, the business income of the unitary group attributable to the qualifying taxpayer shall be determined by multiplying the business income of the unitary group by a fraction, the numerator of which is the property factor plus the payroll factor plus the sales factor, and the denominator of which is three.

The property factor is a fraction, the numerator of which is the average value of the qualifying taxpayer's real and tangible personal property owned or rented and used during the tax period and the denominator of which is the average value of the unitary group's real and tangible personal property owned or rented and used during the tax period.

The payroll factor is a fraction, the numerator of which is the total amount paid during the tax period by the qualifying taxpayer for compensation, and the denominator of which is the total compensation paid by the unitary group during the tax period.

The sales factor is a fraction, the numerator of which is the total sales of the qualifying taxpayer during the tax period, and the denominator of which is the total sales of the unitary group during the tax period.

(D) For purposes of this subsection, the secretary of revenue, upon a showing of good cause and after receiving a certification by the secretary of commerce of substantial compliance with provisions of this subsection (b)(6), may extend any required performance date provided in this subsection (b)(6) for a period not to exceed six months.

(c) For tax years commencing on or after January 1, 2027, all business income shall be apportioned to this state by multiplying the business income by the sales factor.

(d) Any taxpayer having previously made an election pursuant to subsection (b)(2) shall be permitted to apportion income through the use of the single sales factor.

(e) (1) There shall be allowed as a deduction an amount computed in accordance with this subsection.

(2) As of July 1, 2025, only publicly traded companies, including affiliated corporations participating in the filing of a publicly traded SENATE BILL No.

300—page 5 company's financial statements prepared in accordance with generally accepted accounting principles, shall be eligible for this deduction.

(3) If the provisions of this section result in an aggregate increase in the taxpayer's net deferred tax liability or an aggregate decrease in the taxpayer's net deferred tax asset, or an aggregate change from a net deferred tax asset to a net deferred tax liability, the taxpayer shall be entitled to a deduction, as determined in this subsection.

For the purposes of this section, the term "taxpayer" includes a unitary group of businesses that is required to file a combined report.

The deferred tax impact deduction provided under this section for a unitary group of businesses that is required to file a combined report shall be calculated using unitary net deferred tax assets and liabilities and deducted against unitary group income.

(4) A taxpayer shall be entitled to a deferred tax impact deduction from the taxpayer's net business income before apportionment equal to the amount necessary to offset the increase in the net deferred tax liability or decrease in the net deferred tax asset, or aggregate change from a net deferred tax asset to a net deferred tax liability.

Such increase in the net deferred tax liability, decrease in the net deferred tax asset or the aggregate change from a net deferred tax asset to a net deferred tax liability shall be computed based on the change that would result from the imposition of the single sales factor requirements pursuant to this section, excluding the deduction provided under this paragraph, as of the end of the tax year prior to tax year 2025.

The amount of the deduction shall equal the annual deferred tax deduction amount set forth in paragraph (5).

(5) The annual deferred tax deduction amount shall be calculated as follows:

(A) The deferred tax impact determined in paragraph (4) shall be divided by the income tax rate for corporations in effect for the tax year pursuant to K.S.A.

79-32,110, and amendments thereto;

(B) the resulting amount shall be further divided by the Kansas apportionment factor that was used by the taxpayer in the calculation of the deferred tax assets and deferred tax liabilities as provided in this subsection;

and (C) the result multiplied by / 1 10 shall represent the total net deferred tax deduction available for the first tax year beginning on or after January 1, 2035, and the next nine successive tax years.

(6) The deduction calculated under paragraph (5) shall not be adjusted as a result of any events subsequent to such calculation, including, but not limited to, any disposition or abandonment of assets.

Such deduction shall be calculated without regard to any tax liabilities under the federal internal revenue code and shall not alter the tax basis of any asset.

If the deduction under this section is greater than the taxpayer's net business income before apportionment, any excess deduction shall be carried forward and applied as a deduction for future tax years until fully utilized.

(7) At the discretion of the taxpayer, the taxpayer shall be allowed to claim other available tax credits before claiming the deferred tax deduction calculated under this section.

Any deferred tax deduction calculated under this section not claimed on a return shall be carried forward and applied as a deduction for future tax years until fully utilized.

(8) Any taxpayer intending to claim a deduction under this subsection shall file a statement with the secretary on or before July 1, 2027, specifying the total amount of the deduction that the taxpayer claims on such form and in such manner as prescribed by the secretary and shall contain such information or calculations as the secretary may specify.

No deduction shall be allowed under this section for any SENATE BILL No.

300—page 6 taxable year except to the extent claimed in the manner prescribed on or before July 1, 2027.

(9) For purposes of this subsection:

(A) "Net deferred tax liability" means deferred tax liabilities that exceed the deferred tax assets of the taxpayer, as computed in accordance with generally accepted accounting principles.

(B) "Net deferred tax asset" means that deferred tax assets exceed the deferred tax liabilities of the taxpayer, as computed in accordance with generally accepted accounting principles.

(f) Any manufacturer of alcoholic liquor as defined in K.S.A.

41- 102, and amendments thereto, who sells to a distributor as defined in K.S.A.

41-102, and amendments thereto, shall be apportioned to this state by multiplying the business income by a fraction, the numerator of which is the property factor plus the payroll factor and the sales factor, and the denominator of which is three.

(1) Notwithstanding any other provision of this section, for all tax years commencing on or after January 1, 2027, any taxpayer classified as a manufacturer of alcoholic liquor, as defined in K.S.A.

41-102, and amendments thereto, shall apportion business income to this state as follows:

(A) Qualifying Kansas investors shall apportion business income using the single sales factor method if such taxpayer maintains both:

(i) An average value of real and tangible personal property owned or rented that exceeds $5,000,000 and such property is used in this state during the tax year;

and (ii) the total amount of compensation paid in this state during the tax year exceeded $2,000,000;

or (B) general manufacturers, including all other manufacturers of alcoholic liquor besides qualifying Kansas investors, shall apportion business income using the three-factor formula provided in subsection (b)(1).

(2) The secretary of revenue may adopt rules and regulations necessary to administer the provisions of this subsection.

9-230179-32,117, isas hereby amended toby readsection as4 follows:of Senate Bill No.

9-2301.368, is hereby amended to read as follows:

(a)79- The32,117. provisions of K.S.A.

9-2301(a) throughThe 9-2327,Kansas andadjusted amendmentsgross thereto,income andof sectionan 1,individual andmeans amendmentssuch thereto,individual's shallfederal beadjusted knowngross andincome mayfor bethe citedtaxable asyear, with the technology-enabledmodifications fiduciaryspecified financialin institutionsthis act.section.

The(b) There technology-enabled fiduciary financial institutions act shall be aadded part of and supplemental to chapterfederal 9adjusted ofgross theincome: Kansas Statutes Annotated, and amendments thereto.

(b) For(i) Interest purposesincome less any related expenses directly incurred in the purchase of state or political subdivision obligations, to the technology-enabledextent fiduciarythat financialthe institutionssame act:is not included in federal adjusted gross income, on obligations of any state or political subdivision thereof, but to the extent that interest income on obligations of this state or a political subdivision thereof issued prior to January 1, 1988, is specifically exempt from income tax under the laws of this state authorizing the issuance of such obligations, it shall be excluded from computation of Kansas adjusted gross income whether or not included in federal adjusted gross income.

(1) "Act"Interest meansincome theon technology-enabledobligations fiduciaryof financialthis institutionsstate act;or a political subdivision thereof issued after December 31, 1987, shall be excluded from computation of Kansas adjusted gross income whether or not included in federal adjusted gross income.

(2) "alternative(ii) Taxes asset"on meansor professionallymeasured managedby investmentincome assetsor thatfees areor notpayments publiclyin traded,lieu including,of butincome taxes imposed by this state or any other taxing jurisdiction to the extent deductible in determining federal adjusted gross income and not limitedcredited to,against privatefederal SBincome 300—Am.tax.

byThis HCparagraph 2shall equity,not ventureapply capital,to leveragedtaxes buyouts,imposed specialunder situations,the structuredprovisions credit,of privateK.S.A. debt, private real estate funds and natural resources, including any economic or beneficial interest therein;

(3) "alternative79-1107 asset custody account" means an account created by the owner of an alternative asset that designates a fiduciary financial institution as custodian or agent79-1108, and intoamendments whichthereto, thefor ownerprivilege transfers,tax electronicallyyear or1995, otherwise, content, materials, data, information, documents, reports and contractsall insuch anyyears form,thereafter. including, without limitation, evidence of ownership, subscription agreements, private placement memoranda, limited partnership agreements, operating agreements, financial statements, annual and quarterly reports, capital account statements, tax statements, correspondence from the general partner, manager or investment advisor of the alternative asset, an investment contract as defined in K.S.A.

17-12a102(28)(E),(iii) The andfederal amendmentsnet thereto,operating andloss anydeduction, digitalexcept assetthat asthe definedSENATE inBILL K.S.A.No.

58-4802,300—page and7 amendmentsfederal thereto,net whetheroperating suchloss informationdeduction isshall innot hardbe copyadded formto oran aindividual's representationfederal ofadjusted suchgross informationincome thatfor istax storedyears inbeginning aafter computerDecember readable31, format;2016.

(4) "charitable(iv) Federal beneficiaries"income meanstax onerefunds orreceived moreby charities,the contributionstaxpayer toif whichthe are allowable as a deduction pursuantof tothe sectiontaxes 170being ofrefunded theresulted federalin internala revenuetax codebenefit thatfor areKansas designatedincome astax beneficiariespurposes ofduring a fidfinprior trust;taxable year.

(5) "custodialSuch services"refunds meansshall thebe safekeepingincluded andin managementincome ofin anthe alternativeyear assetactually custodyreceived account,regardless includingof the executionmethod of customeraccounting instructions,used servingby as agent, fund administrative services and overall decision-making and management of the accounttaxpayer. by a fiduciary financial institution and.

"CustodialFor services"purposes hereof, a tax benefit shall be deemed to involvehave resulted if the exerciseamount of fiduciarythe andtax trusthad powers;been deducted in determining income subject to a Kansas income tax for a prior year regardless of the rate of taxation applied in such prior year to the Kansas taxable income, but only that portion of the refund shall be included as bears the same proportion to the total refund received as the federal taxes deducted in the year to which such refund is attributable bears to the total federal income taxes paid for such year.

(6) "director"For meanspurposes aof personthe designatedforegoing assentence, afederal membertaxes ofshall thebe boardconsidered ofto directorshave pursuantbeen deducted only to K.S.A.the extent such deduction does not reduce Kansas taxable income below zero.

9-2306,(v) The andamount amendmentsof thereto;any depreciation deduction or business expense deduction claimed on the taxpayer's federal income tax return for any capital expenditure in making any building or facility accessible to the handicapped, for which expenditure the taxpayer claimed the credit allowed by K.S.A.

(7) "economic79-32,177, growthand zone"amendments meansthereto. an incorporated community with a population of not more than 5,000 people located within one of the following counties:

Allen,(vi) Any Anderson,amount Barber,of Bourbon,designated Brown,employee Chase,contributions Chautauqua,picked Cherokee,up Cheyenne,by Clark,an Clay,employer Cloud,pursuant Coffey,to Comanche,K.S.A. Decatur, Doniphan, Edwards, Elk, Ellsworth, Gove, Graham, Grant, Gray, Greeley, Greenwood, Hamilton, Harper, Harvey, Haskell, Hodgeman, Jackson, Jewell, Kearny, Kingman, Kiowa, Labette, Lane, Lincoln, Linn, Logan, Marion, Marshall, Meade, Mitchell, Montgomery, Morris, Morton, Nemaha, Neosho, Ness, Norton, Osborne, Ottawa, Pawnee, Phillips, Pratt, Rawlins, Republic, Rice, Rooks, Rush, Russell, Scott, Sheridan, Sherman, Smith, Stafford, Stanton, Stevens, Sumner, Trego, Thomas, Wabaunsee, Wallace, Washington, Wichita, Wilson or Woodson;

(8) "excluded12-5005, fiduciary"20-2603, means74-4919 aand fiduciary74- financial4965, institutionand inamendments itsthereto. SB 300—Am.

by(vii) The HCamount 3 capacity as trustee of aany fidfincharitable trust,contribution providedmade except that a fiduciary financial institution shall only be deemed an "excluded fiduciary" to the extent the fiduciarysame financial institution is excludedclaimed fromas exercising certain powers under the instrumentbasis thatfor may be exercised by the trustcredit advisorallowed orpursuant otherto personsK.S.A. designated in the instrument;

(9) "fidfin,"79-32,196, "fidfin services" or "fidfin transactions" means the financing of a fidfin trust or the acquisition of alternative assets on behalf of and throughamendments athereto. fidfin trust, or both, as provided in K.S.A.

9-2311,(viii) The andamount amendmentsof thereto,any includingcosts loans,incurred extensionsfor ofimprovements to a swine facility, claimed for deduction in determining federal adjusted gross income, to the extent the same is claimed as the basis for any credit andallowed directpursuant investments;to K.S.A.

(10) "fidfin79-32,204, trust"and meansamendments athereto. trust created to facilitate the delivery of fidfin services by a fiduciary financial institution;

(11) "fiduciary"(ix) The meansamount aof trustee,any aad trustvalorem advisortaxes orand aassessments custodianpaid and the amount of anany alternativecosts assetincurred custodyfor accounthabitat appointedmanagement underor anconstruction instrumentand thatmaintenance isof actingimprovements on real property, claimed for deduction in adetermining fiduciaryfederal capacityadjusted gross income, to the extent the same is claimed as the basis for any person,credit trustallowed orpursuant estate;to K.S.A.

(12) "instrument"79-32,203, meansand anyamendments documentthereto. creating a fidfin trust or alternative asset custody account;

(13) "officer"(x) Amounts meansreceived aas personnonqualified whowithdrawals, participatesas ordefined hasby authorityK.S.A. to participate, other than in the capacity of a director, in major policymaking functions of a bank, trust company or fiduciary financial institution, whether or not the officer has an official title or if the officer is serving without salary or other compensation.

"Officer"75-643, includesand amendments thereto, if, at the chairpersontime of thecontribution board,to president,a vicefamily president,postsecondary cashier,education secretarysavings andaccount, treasurersuch ofamounts awere bank,subtracted trustfrom companythe federal adjusted gross income pursuant to subsection (c)(xv) or fiduciaryif financialsuch institution;amounts are not already included in the federal adjusted gross income.

(14) "organizer"(xi) The meansamount aof personany whocontribution filedmade to the fiduciarysame financialextent institutionthe formationsame documents;is claimed as the basis for the credit allowed pursuant to K.S.A.

(15) "out-of-state74-50,154, bank" means a national or state bank, savings and loanamendments associationthereto. or savings bank not incorporated under the laws of Kansas;

(16) "out-of-state(xii) For financialtaxable institution"years meanscommencing anafter out-of-stateDecember bank31, or2004, anamounts out-of-statereceived trustas company;withdrawals not in accordance with the provisions of K.S.A.

(17) "out-of-state74-50,204, trustand company"amendments meansthereto, aif, nationalat the time of contribution to an individual development account, such amounts were subtracted from the federal adjusted gross income pursuant to subsection (c)(xiii), or stateif trustsuch companyamounts are not incorporatedalready underincluded in the lawsfederal ofadjusted Kansas;gross income.

(18)(xiii) The (A) "qualifiedamount investment"of meansany theexpenditures purchaseclaimed orfor development,deduction in thedetermining aggregate,federal ofadjusted atgross leastincome, 10,000to squarethe feetextent of commercial, industrial, multiuse or multifamily real estate in the economicsame growthis zoneclaimed whereas the fiduciarybasis financialfor institutionany maintainscredit itsallowed principal office pursuant to K.S.A.

9-2309,79- and32,217 amendmentsthrough thereto,79-32,220 providedor that79-32,222, suchand communityamendments hasthereto. committed to develop the necessary infrastructure to support a "qualified investment."A"qualified investment":

(i) MaySENATE include,BILL asNo. part of satisfying the square footage requirements, the suitable office space of such fiduciary financial institution, as provided in K.S.A.

9-2309,300—page and8 amendments(xiv) The thereto,amount ifof ownedany byamortization deduction claimed in determining federal adjusted gross income to the fiduciaryextent SBthe 300—Am.same is claimed for deduction pursuant to K.S.A.

by79-32,221, HCand 4amendments financialthereto. institution;

(ii) shall(xv) The beamount exemptof fromany expenditures claimed for deduction in determining federal adjusted gross income, to the provisionsextent andthe limitationssame ofis claimed as the basis for any credit allowed pursuant to K.S.A.

9-79- 1102,32,223 through 79-32,226, 79-32,228 through 79-32,231, 79-32,233 through 79-32,236, 79-32,238 through 79-32,241, 79-32,245 through 79-32,248 or 79-32,251 through 79-32,254, and amendments thereto;thereto.

(iii) may(xvi) The beamount retainedof byany aamortization fiduciarydeduction financialclaimed institutionin fordetermining asfederal longadjusted asgross income to the fiduciaryextent financialthe institutionsame operatesis inclaimed thisfor state;deduction pursuant to K.S.A.

and79-32,227, (iv) may79-32,232, be79- sold,32,237, transferred79-32,249, or79-32,250 otherwise disposed of, including a sale or transfer79-32,255, toand anamendments affiliatethereto. of the fiduciary financial institution, if the fiduciary financial institution continues to maintain its principal office in an economic growth zone pursuant to K.S.A.

9-2309,(xvii) The andamount amendmentsof thereto;any amortization deduction claimed in determining federal adjusted gross income to the extent the same is claimed for deduction pursuant to K.S.A.

(B) notwithstanding79-32,256, theand foregoingamendments provisions,thereto. if a fiduciary financial institution leases any portion of a qualified investment made by another fiduciary financial institution as the lessee fiduciary financial institution's suitable office space:

(i) The(xviii) For lesseetaxable fiduciaryyears financialcommencing institutionafter shallDecember make,31, 2006, the amount of any ad valorem or causeproperty totaxes beand made,assessments paid to a qualifiedstate investmentother than Kansas or local government located in ana economicstate growthother zonethan Kansas by a taxpayer who resides in a state other than Kansas, when the economiclaw growthof zonesuch wherestate does not allow a resident of Kansas who earns income in such fiduciaryother financialstate institutionto maintainsclaim itsa principaldeduction office;for ad valorem or property taxes or assessments paid to a political subdivision of the state of Kansas in determining taxable income for income tax purposes in such other state, to the extent that such taxes and assessments are claimed as an itemized deduction for federal income tax purposes.

(ii) the(xix) For leasedtaxable squareyears footagebeginning shallafter countDecember toward31, the2012, squareand footageending requirementbefore applicableJanuary to1, a2017, qualifiedthe investmentamount under this section, if such lease has an initial term of notany: less than five years;

and(1) (iii) theLoss squarefrom footagebusiness requirementas otherwisedetermined applicableunder tothe afederal qualifiedinternal investmentrevenue ofcode theand lesseereported fiduciaryfrom financialschedule institutionC shalland beon reducedline from12 10,000of squarethe feettaxpayer's toform 5,0001040 squarefederal feet;individual income tax return;

(19) "technology-enabled(2) fiduciaryloss financialfrom institution"rental orreal "fiduciaryestate, financialroyalties, institution"partnerships, meansS anycorporations, limitedexcept liabilitythose company,with limitedwholly partnershipowned orsubsidiaries corporationsubject that:to the Kansas privilege tax, estates, trusts, residual interest in real estate mortgage investment conduits and net farm rental as determined under the federal internal revenue code and reported from schedule E and on line 17 of the taxpayer's form 1040 federal individual income tax return;

(A) Isand organized(3) tofarm performloss anyas onedetermined orunder morethe federal internal revenue code and reported from schedule F and on line of the activitiestaxpayer's andform services1040 authorizedfederal byincome thistax act;return;

(B) hasall been authorized to conductthe businessextent asdeducted aor fiduciarysubtracted financialin institutiondetermining underthe thistaxpayer's chapterfederal pursuantadjusted togross theincome. provisions of K.S.A.

9-2302,For purposes of this subsection, references to the federal form 1040 and amendmentsfederal thereto;schedule C, schedule E, and schedule F, shall be to such form and schedules as they existed for tax year 2011, and as revised thereafter by the internal revenue service.

(C) has(xx) For made,taxable committedyears beginning after December 31, 2012, and ending before January 1, 2017, the amount of any deduction for self- employment taxes under section 164(f) of the federal internal revenue code as in effect on January 1, 2012, and amendments thereto, in determining the federal adjusted gross income of an individual taxpayer, to makethe orextent causedthe deduction is attributable to beincome madereported aon qualifiedschedule investment;C, E or F and on line 12, 17 or 18 of the taxpayer's form federal income tax return.

(xxi) For taxable years beginning after December 31, 2012, and (D) hasending committed,before inJanuary or1, as2017, athe partamount of any deduction for pension, profit sharing, and annuity plans of self-employed individuals under section 62(a)(6) of the applicationfederal providedinternal revenue code as in K.S.A.effect on January 1, 2012, and amendments thereto, in determining the federal SENATE BILL No.

9-2302,300—page and9 amendmentsadjusted thereto,gross toincome conductof anyan fidfinindividual transactionstaxpayer. in accordance with K.S.A.

9-2311,(xxii) For taxable years beginning after December 31, 2012, and ending before January 1, 2017, the amount of any deduction for health insurance under section 162(l) of the federal internal revenue code as in effect on January 1, 2012, and amendments thereto, includingin determining the distributionsfederal requiredadjusted therein;gross income of an individual taxpayer.

(20) "trust"(xxiii) For meanstaxable ayears trustbeginning createdafter pursuantDecember to31, 2012, and ending before January 1, 2017, the Kansasamount uniformof trustany code,deduction K.S.A.for domestic production activities under section 199 of the federal internal revenue code as in effect on January 1, 2012, and amendments thereto, in determining the federal adjusted gross income of an individual taxpayer.

58a-101(xxiv) For ettaxable seq.,years andcommencing amendmentsafter thereto,December or31, created2013, pursuantthat toportion of the Kansasamount businessof trustany actexpenditure deduction claimed in determining federal adjusted gross income for expenses paid for medical care of 1961,the taxpayer or the taxpayer's spouse or dependents when such expenses were paid or incurred for an abortion, or for a health benefit plan, as defined in K.S.A.

17-270765-6731, et seq., and amendments thereto;thereto, for the purchase of an optional rider for coverage of abortion in accordance with K.S.A.

(21) "trust40-2,190, advisor"and meansamendments athereto, fiduciaryto grantedthe authorityextent bythat such taxes and assessments are claimed as an SBitemized 300—Am.deduction for federal income tax purposes.

by(xxv) For HCtaxable 5years instrumentcommencing toafter exercise,December consent,31, direct,2013, includingthat portion of the poweramount toof directany expenditure deduction claimed in determining federal adjusted gross income for expenses paid by a taxpayer for health care when such expenses were paid or incurred for abortion coverage, a health benefit plan, as provideddefined in K.S.A.

58a-808,65-6731, and amendments thereto, orwhen approvesuch allexpenses orwere anypaid portionor ofincurred thefor powersabortion andcoverage discretionor conferredamounts uponcontributed theto trusteehealth ofsavings aaccounts fidfinfor trust,such includingtaxpayer's theemployees powerfor to invest the assetspurchase of aan fidfinoptional trustrider orfor makecoverage orof causeabortion distributionsin toaccordance bewith madeK.S.A. from such fidfin trust;

40-2,190, and (22) theamendments definitionsthereto, ofto K.S.A.the extent that such taxes and assessments are claimed as a deduction for federal income tax purposes.

9-701,(xxvi) For andall amendmentstaxable thereto,years applybeginning after December 31, 2016, the amount of any charitable contribution made to fiduciarythe financialextent institutionsthe exceptsame is claimed as otherwisethe providedbasis infor thisthe act.credit allowed pursuant to K.S.A.

72- 4357, and amendments thereto, and is also claimed as an itemized deduction for federal income tax purposes.

(xxvii) For all taxable years commencing after December 31, 2020, the amount of any interest expense paid or accrued in a previous taxable year but allowed as a deduction pursuant to section 163 of the federal internal revenue code in the current taxable year by reason of the carryforward of disallowed business interest pursuant to section 163(j) of the federal internal revenue code.

For purposes of this paragraph, an interest expense is considered paid or accrued only in the first taxable year the deduction would have been allowable pursuant to section 163 of the federal internal revenue code if the limitation pursuant to section 163(j) of the federal internal revenue code did not exist.

(xxviii) For all taxable years beginning after December 31, 2021, the amount of any contributions to, or earnings from, a first-time home buyer savings account if distributions from the account were not used to pay for expenses or transactions authorized pursuant to K.S.A.

58- 4904, and amendments thereto, or were not held for the minimum length of time required pursuant to K.S.A.

58-4904, and amendments thereto.

Contributions to, or earnings from, such account shall also include any amount resulting from the account holder not designating a surviving payable on death beneficiary pursuant to K.S.A.

58-4904(e), and amendments thereto.

SENATE BILL No.

300—page 10 (xxix) For all taxable years beginning after December 31, 2024, the amount of any contributions to, or earnings from, an adoption savings account if distributions from the account were not used to pay for expenses or transactions authorized pursuant to K.S.A.

2025 Supp.

38-2504, and amendments thereto, or were not held for the minimum length of time required pursuant to K.S.A.

2025 Supp.

38-2504, and amendments thereto.

Contributions to, or earnings from, such account shall also include any amount resulting from the account holder not designating a surviving payable on death beneficiary pursuant to K.S.A.

2025 Supp.

38-2504(e), and amendments thereto.

(c) There shall be subtracted from federal adjusted gross income:

(i) Interest or dividend income on obligations or securities of any authority, commission or instrumentality of the United States and its possessions less any related expenses directly incurred in the purchase of such obligations or securities, to the extent included in federal adjusted gross income but exempt from state income taxes under the laws of the United States.

(ii) Any amounts received which are included in federal adjusted gross income but which are specifically exempt from Kansas income taxation under the laws of the state of Kansas.

(iii) The portion of any gain or loss from the sale or other disposition of property having a higher adjusted basis for Kansas income tax purposes than for federal income tax purposes on the date such property was sold or disposed of in a transaction in which gain or loss was recognized for purposes of federal income tax that does not exceed such difference in basis, but if a gain is considered a long-term capital gain for federal income tax purposes, the modification shall be limited to that portion of such gain which is included in federal adjusted gross income.

(iv) The amount necessary to prevent the taxation under this act of any annuity or other amount of income or gain which was properly included in income or gain and was taxed under the laws of this state for a taxable year prior to the effective date of this act, as amended, to the taxpayer, or to a decedent by reason of whose death the taxpayer acquired the right to receive the income or gain, or to a trust or estate from which the taxpayer received the income or gain.

(v) The amount of any refund or credit for overpayment of taxes on or measured by income or fees or payments in lieu of income taxes imposed by this state, or any taxing jurisdiction, to the extent included in gross income for federal income tax purposes.

(vi) Accumulation distributions received by a taxpayer as a beneficiary of a trust to the extent that the same are included in federal adjusted gross income.

(vii) Amounts received as annuities under the federal civil service retirement system from the civil service retirement and disability fund and other amounts received as retirement benefits in whatever form which were earned for being employed by the federal government or for service in the armed forces of the United States.

(viii) Amounts received by retired railroad employees as a supplemental annuity under the provisions of 45 U.S.C.

§§ 228b(a) and 228c(a)(1) et seq.

(ix) Amounts received by retired employees of a city and by retired employees of any board of such city as retirement allowances pursuant to K.S.A.

13-14,106, and amendments thereto, or pursuant to any charter ordinance exempting a city from the provisions of K.S.A.

13-14,106, and amendments thereto.

(x) (1) For taxable years beginning after December 31, 2021, the amount of any federal credit disallowance under the provisions of 26 U.S.C.

§ 280C(a).

SENATE BILL No.

300—page 11 (2) For taxable years beginning after December 31, 2019, and ending before January 1, 2022, 50% of the amount of the federal employee retention credit disallowance under rules similar to the rules of 26 U.S.C.

§ 280C(a).

The taxpayer shall be required to prove that such taxpayer previously filed Kansas income tax returns and paid Kansas income tax on the disallowed amount.

Notwithstanding any other provision of law to the contrary, any claim for refund or amended return relating to this subparagraph shall be allowed to be filed on or before April 15, 2025, and no claim for refund or amended return shall be allowed or filed afterApril 15, 2025.

(xi) For taxable years beginning after December 31, 1986, dividend income on stock issued by Kansas venture capital, inc.

(xii) For taxable years beginning after December 31, 1989, amounts received by retired employees of a board of public utilities as pension and retirement benefits pursuant to K.S.A.

13-1246, 13-1246a and 13-1249, and amendments thereto.

(xiii) For taxable years beginning after December 31, 2004, amounts contributed to and the amount of income earned on contributions deposited to an individual development account under K.S.A.

74-50,201 et seq., and amendments thereto.

(xiv) For all taxable years commencing after December 31, 1996, that portion of any income of a bank organized under the laws of this state or any other state, a national banking association organized under the laws of the United States, an association organized under the savings and loan code of this state or any other state, or a federal savings association organized under the laws of the United States, for which an election as an S corporation under subchapter S of the federal internal revenue code is in effect, which accrues to the taxpayer who is a stockholder of such corporation and which is not distributed to the stockholders as dividends of the corporation.

For taxable years beginning after December 31, 2012, and ending before January 1, 2017, the amount of modification under this subsection shall exclude the portion of income or loss reported on schedule E and included on line of the taxpayer's form 1040 federal individual income tax return.

(xv) The cumulative amounts not exceeding $3,000, or $6,000 for a married couple filing a joint return, for each designated beneficiary that are contributed to:

(1) A family postsecondary education savings account established under the Kansas postsecondary education savings program or a qualified tuition program established and maintained by another state or agency or instrumentality thereof pursuant to section of the internal revenue code of 1986, as amended, for the purpose of paying the qualified higher education expenses of a designated beneficiary;

or (2) an achieving a better life experience (ABLE) account established under the Kansas ABLE savings program or a qualified ABLE program established and maintained by another state or agency or instrumentality thereof pursuant to section 529A of the internal revenue code of 1986, as amended, for the purpose of saving private funds to support an individual with a disability.

The terms and phrases used in this paragraph shall have the meaning respectively ascribed thereto by the provisions of K.S.A.

75-643 and 75-652, and amendments thereto, and the provisions of such sections are hereby incorporated by reference for all purposes thereof.

For all taxable years beginning after December 31, 2022, contributions made to a qualified tuition program account or a qualified ABLE program account pursuant to this paragraph on and after January 1 but prior to the date required for filing a return pursuant to K.S.A.

79-3221, and amendments thereto, of the successive taxable year may be elected by the taxpayer to apply to the prior taxable year if such election is made at the time of filing the return.

No contribution shall be used as a modification pursuant to this SENATE BILL No.

300—page 12 paragraph in more than one taxable year.

(xvi) For all taxable years beginning after December 31, 2004, amounts received by taxpayers who are or were members of the armed forces of the United States, including service in the Kansas army and air national guard, as a recruitment, sign up or retention bonus received by such taxpayer as an incentive to join, enlist or remain in the armed services of the United States, including service in the Kansas army and air national guard, and amounts received for repayment of educational or student loans incurred by or obligated to such taxpayer and received by such taxpayer as a result of such taxpayer's service in the armed forces of the United States, including service in the Kansas army and air national guard.

(xvii) For all taxable years beginning after December 31, 2004, amounts received by taxpayers who are eligible members of the Kansas army and air national guard as a reimbursement pursuant to K.S.A.

48- 281, and amendments thereto, and amounts received for death benefits pursuant to K.S.A.

48-282, and amendments thereto, to the extent that such death benefits are included in federal adjusted gross income of the taxpayer.

(xviii) (A) For all taxable years beginning after December 31, 2007, and ending before January 1, 2024, amounts received as benefits under the federal social security act which are included in federal adjusted gross income of a taxpayer with federal adjusted gross income of $75,000 or less, whether such taxpayer's filing status is single, head of household, married filing separate or married filing jointly.

(B) For all taxable years beginning after December 31, 2023, amounts received as benefits under the federal social security act that are included in federal adjusted gross income of a taxpayer.

(xix) Amounts received by retired employees of Washburn university as retirement and pension benefits under the university's retirement plan.

(xx) For taxable years beginning after December 31, 2012, and ending before January 1, 2017, the amount of any:

(1) Net profit from business as determined under the federal internal revenue code and reported from schedule C and on line 12 of the taxpayer's form 1040 federal individual income tax return;

(2) net income, not including guaranteed payments as defined in section 707(c) of the federal internal revenue code and as reported to the taxpayer from federal schedule K- 1, (form 1065-B), in box 9, code F or as reported to the taxpayer from federal schedule K-1, (form 1065) in box 4, from rental real estate, royalties, partnerships, S corporations, estates, trusts, residual interest in real estate mortgage investment conduits and net farm rental as determined under the federal internal revenue code and reported from schedule E and on line 17 of the taxpayer's form 1040 federal individual income tax return;

and (3) net farm profit as determined under the federal internal revenue code and reported from schedule F and on line 18 of the taxpayer's form 1040 federal income tax return;

all to the extent included in the taxpayer's federal adjusted gross income.

For purposes of this subsection, references to the federal form and federal schedule C, schedule E, and schedule F, shall be to such form and schedules as they existed for tax year 2011 and as revised thereafter by the internal revenue service.

(xxi) For all taxable years beginning after December 31, 2013, amounts equal to the unreimbursed travel, lodging and medical expenditures directly incurred by a taxpayer while living, or a dependent of the taxpayer while living, for the donation of one or more human organs of the taxpayer, or a dependent of the taxpayer, to another person for human organ transplantation.

The expenses may be claimed as a subtraction modification provided for in this section to the SENATE BILL No.

300—page 13 extent the expenses are not already subtracted from the taxpayer's federal adjusted gross income.

In no circumstances shall the subtraction modification provided for in this section for any individual, or a dependent, exceed $5,000.

As used in this section, "human organ" means all or part of a liver, pancreas, kidney, intestine, lung or bone marrow.

The provisions of this paragraph shall take effect on the day the secretary of revenue certifies to the director of the budget that the cost for the department of revenue of modifications to the automated tax system for the purpose of implementing this paragraph will not exceed $20,000.

(xxii) For taxable years beginning after December 31, 2012, and ending before January 1, 2017, the amount of net gain from the sale of:

(1) Cattle and horses, regardless of age, held by the taxpayer for draft, breeding, dairy or sporting purposes, and held by such taxpayer for 24 months or more from the date of acquisition;

and (2) other livestock, regardless of age, held by the taxpayer for draft, breeding, dairy or sporting purposes, and held by such taxpayer for 12 months or more from the date of acquisition.

The subtraction from federal adjusted gross income shall be limited to the amount of the additions recognized under the provisions of subsection (b)(xix) attributable to the business in which the livestock sold had been used.

As used in this paragraph, the term "livestock" does not include poultry.

(xxiii) For all taxable years beginning after December 31, 2012, amounts received under either the Overland Park, Kansas police department retirement plan or the Overland Park, Kansas fire department retirement plan, both as established by the city of Overland Park, pursuant to the city's home rule authority.

(xxiv) For taxable years beginning after December 31, 2013, and ending before January 1, 2017, the net gain from the sale from Christmas trees grown in Kansas and held by the taxpayer for six years or more.

(xxv) For all taxable years commencing after December 31, 2020, 100% of global intangible low-taxed income under section 951A of the federal internal revenue code of 1986, before any deductions allowed under section 250(a)(1)(B) of such code.

(xxvi) (1) For all taxable years commencing after December 31, 2020, the amount of any interest expense paid or accrued in the current taxable year and disallowed as a deduction pursuant to section 163(j) of the federal internal revenue code.

(2) For purposes of this paragraph, an interest expense is considered paid or accrued only in the first taxable year the deduction would have been allowable pursuant to section 163 of the federal internal revenue code if the limitation pursuant to section 163(j) of the federal internal revenue code did not exist.

(3) For tax year 2021, an amount equal to the sum of any interest expenses paid or accrued in tax years 2018, 2019 and 2020 less the sum of amounts allowed as a deduction pursuant to section 163 of the federal internal revenue code in tax years 2018, 2019 and 2020.

(xxvii) For taxable years commencing after December 31, 2020, the amount disallowed as a deduction pursuant to section 274 of the federal internal revenue code of 1986 for meal expenditures shall be allowed to the extent such expense was deductible for determining federal income tax and was allowed and in effect on December 31, 2017.

(xxviii) For all taxable years beginning after December 31, 2021:

(1) The amount contributed to a first-time home buyer savings account pursuant to K.S.A.

58-4903, and amendments thereto, in an amount not to exceed $3,000 for an individual or $6,000 for a married couple filing a joint return;

or (2) amounts received as income earned from assets in SENATE BILL No.

300—page 14 a first-time home buyer savings account.

For all taxable years beginning after December 31, 2022, contributions made to a first-time home buyer savings account pursuant to subparagraph (1) on and after January 1 but prior to the date required for filing a return pursuant to K.S.A.

79-3221, and amendments thereto, of the successive taxable year may be elected by the taxpayer to apply to the prior taxable year if such election is made at the time of filing the return.

No contribution shall be used as a modification pursuant to subparagraph (1) in more than one taxable year.

(xxix) For taxable years beginning after December 31, 2017, for an individual taxpayer who carried back federal net operating losses arising in a taxable year beginning after December 31, 2017, and before January 1, 2021, pursuant to section 172(b)(1) of the federal internal revenue code as amended by the coronavirus aid, relief, and economic security act (CARES act), the amount of such federal net operating loss carryback for each applicable year.

If the amount of such federal net operating loss carryback exceeds the taxpayer's Kansas adjusted gross income for such taxable year, the amount thereof that exceeds such Kansas adjusted gross income may be carried forward as a subtraction modification in the following taxable year or years until the total amount of such federal net operating loss carryback has been deducted, except that no such unused amount shall be carried forwath for deduction as a subtraction modification after the 20 taxable year following the taxable year of the net operating loss.

Notwithstanding any other provision of law to the contrary, an extension of time shall be allowed for a claim for refund or amended return for tax years 2018, or 2020 limited to the application of the provisions of this paragraph and such claim for refund or amended return must be filed on or beforeApril 15, 2025.

(xxx) For all taxable years beginning after December 31, 2024:

(1) The amount contributed to an adoption savings account pursuant to K.S.A.

2025 Supp.

38-2503, and amendments thereto, in an amount not to exceed $6,000 for an individual or $12,000 for a married couple filing a joint return;

or (2) amounts received as income earned from assets in an adoption savings account.

(xxxi) For all taxable years beginning after December 31, 2026:

(1) Amounts of qualified health care sharing expenses paid by a qualified individual taxpayer during the taxable year as provided in section 3 of 2026 Senate Bill No.

368, and amendments thereto, to the extent that such amounts are not already deducted on the taxpayer's federal income tax return for such taxable year when determining the taxpayer's federal adjusted gross income or are not otherwise subtracted or deducted from the taxpayer's federal adjusted gross income and in an amount not to exceed $5,000 for an individual or $10,000 for a married couple filing a joint return;

and (2) amounts of qualified health care share received by a qualified individual taxpayer during the taxable year and used for medical expenses as provided in section 3 of 2026 Senate Bill No.

368, and amendments thereto, to the extent that such amounts are included in the taxpayer's federal adjusted gross income and are not otherwise subtracted or deducted from the taxpayer's federal adjusted gross income.

(xxxii) For all taxable years beginning after December 31, 2026, the amount contributed to a portable benefit plan by a hiring party taxpayer through the portable benefit plan account pursuant to section of 2026 House Bill No.

2602, and amendments thereto, to the extent that such contributions are not already deducted on the taxpayer's federal income tax return for such taxable year when determining the taxpayer's federal adjusted gross income or are not otherwise subtracted or deducted from the taxpayer's federal adjusted gross SENATE BILL No.

300—page 15 income.

(xxxiii) For all taxable years beginning after December 31, 2026, the amount contributed to a portable benefit plan pursuant to section 1(c)(1) or (2) of 2026 House Bill No.

2602, and amendments thereto, to the extent that such amount is included in the independent contractor taxpayer's federal adjusted gross income.

(d) There shall be added to or subtracted from federal adjusted gross income the taxpayer's share, as beneficiary of an estate or trust, of the Kansas fiduciary adjustment determined under K.S.A.

79-32,135, and amendments thereto.

(e) The amount of modifications required to be made under this section by a partner which relates to items of income, gain, loss, deduction or credit of a partnership shall be determined under K.S.A.

79-32,131, and amendments thereto, to the extent that such items affect federal adjusted gross income of the partner.

9-230179-3279, is79-32,117, herebyas repealed.amended by section 4 of 2026 Senate Bill No.

368, and 79-32,117, as amended by section 2 of 2026 House Bill No.

2602, are hereby repealed.

4. This act shall take effect and be in force from and after its publication in the statute bookbook. Kansas register.

I hereby certify that the above ILLoriginated in the SENATE, and passed that body __________________________ SENATE adopted Conference Committee Report ________________ _________________________ President of the Senate.

_________________________ Secretary of the Senate.

Passed the H OUSE as amended _________________________ H OUSE adopted Conference Committee Report ________________ _________________________ Speaker of the House.

_________________________ Chief Clerk of the House.

A PPROVED _____________________________ _________________________ Governor.