Kansas Legislature passes tax package with food tax elimination, ‘flat’ tax

TOPEKA (KSNT)— Kansas lawmakers have officially passed a tax package, including eliminating the state’s food sales tax and a ‘flat’ income tax rate.

The Kansas Senate voted 24 to 13 approve Senate Bill 169, sending it to the Governor’s desk. The House voted 85 to 38 to approve the bill. 

The proposal would provide, beginning in tax year 2024, for a single individual income tax rate of 5.15% to be applied to all Kansas taxable income in excess of $12,300 for married individuals filing joint returns and $6,150 for all other individuals. Kansas taxable income less than those amounts would not be taxed.

Some democrats voted against the bill, arguing that the “flat” tax is geared toward helping higher income earners. 

The original bill, which passed the House included a "flat" income tax rate of 5.25%.

"Our bill was 5.25%, this bill lowers it to 5.15%... all of that $80 million difference...all of that additional cost... every single penny of that goes to higher income taxpayers...so that's a shift towards them," said Rep. Tom Sawyer, D-Wichita.

However, Republicans argued that low income filers would still see relief.

Rep. Adam Smith, R-Weskan, argued that while the bill does "primarily benefit" high income earners, there's still savings for low income earners.

"It might be $20, $50, a couple hundred dollars, depending on where you fall in that range, but we still are creating a significant threshold, a significant increase that should really help the lowest income filers," Smith said.

The bill includes a number of tax changes, which includes accelerating the elimination of the state sales tax rate on food and food ingredients to January 1, 2024. Local sales taxes would remain in place. 

Beginning in tax year 2023, the bill would expand the existing income tax exemption for federally taxable Social Security benefits available to taxpayers with $75,000 or less in federal adjusted gross income (FAGI) to phase out taxpayer eligibility for the exemption through a linear transition formula from $75,000 in FAGI to $100,000 in FAGI. The bill would provide for annual increases of $5,000 to the upper bound of the transition beginning in tax year 2024.

To read more about the bill, click here.