Session of 2000
HOUSE BILL No. 2835
By Representatives Findley and
Alldritt, Ballard, Barnes, Crow, Dean,
Flaharty,
Garner, Gatewood, Gilbert, Haley, Henderson, Johnston,
Kirk,
Klein, Kuether, M. Long, McClure, O'Brien, Pauls, E. Peterson,
Phelps,
Reardon, Ruff, Sharp, Showalter, Spangler, Storm, Swenson,
Toelkes,
Wells and Welshimer
2-2
14 AN ACT relating
to income taxation; providing for long-term health care
15 health insurance
premium deductions; amending K.S.A. 1999 Supp.
16 79-32,117 and
repealing the existing section.
17
18 Be it enacted by the Legislature of the
State of Kansas:
19 Section
1. K.S.A. 1999 Supp. 79-32,117 is hereby amended to read
20 as follows: 79-32,117. (a) The Kansas
adjusted gross income of an indi-
21 vidual means such individual's federal
adjusted gross income for the tax-
22 able year, with the modifications specified
in this section.
23 (b) There shall
be added to federal adjusted gross income:
24 (i) Interest
income less any related expenses directly incurred in the
25 purchase of state or political subdivision
obligations, to the extent that
26 the same is not included in federal
adjusted gross income, on obligations
27 of any state or political subdivision
thereof, but to the extent that interest
28 income on obligations of this state or a
political subdivision thereof issued
29 prior to January 1, 1988, is specifically
exempt from income tax under the
30 laws of this state authorizing the issuance
of such obligations, it shall be
31 excluded from computation of Kansas
adjusted gross income whether or
32 not included in federal adjusted gross
income. Interest income on obli-
33 gations of this state or a political
subdivision thereof issued after Decem-
34 ber 31, 1987, shall be excluded from
computation of Kansas adjusted
35 gross income whether or not included in
federal adjusted gross income.
36 (ii) Taxes on or
measured by income or fees or payments in lieu of
37 income taxes imposed by this state or any
other taxing jurisdiction to the
38 extent deductible in determining federal
adjusted gross income and not
39 credited against federal income tax. This
paragraph shall not apply to taxes
40 imposed under the provisions of K.S.A.
79-1107 or 79-1108, and amend-
41 ments thereto, for privilege tax year 1995,
and all such years thereafter.
42 (iii) The federal
net operating loss deduction.
43 (iv) Federal
income tax refunds received by the taxpayer if the de-
44 duction of the taxes being refunded
resulted in a tax benefit for Kansas
2
1 income tax purposes during a prior
taxable year. Such refunds shall be
2 included in income in the year
actually received regardless of the method
3 of accounting used by the taxpayer.
For purposes hereof, a tax benefit
4 shall be deemed to have resulted if
the amount of the tax had been de-
5 ducted in determining income subject
to a Kansas income tax for a prior
6 year regardless of the rate of
taxation applied in such prior year to the
7 Kansas taxable income, but only that
portion of the refund shall be in-
8 cluded as bears the same proportion
to the total refund received as the
9 federal taxes deducted in the year to
which such refund is attributable
10 bears to the total federal income taxes
paid for such year. For purposes
11 of the foregoing sentence, federal taxes
shall be considered to have been
12 deducted only to the extent such deduction
does not reduce Kansas tax-
13 able income below zero.
14 (v) The amount of
any depreciation deduction or business expense
15 deduction claimed on the taxpayer's federal
income tax return for any
16 capital expenditure in making any building
or facility accessible to the
17 handicapped, for which expenditure the
taxpayer claimed the credit al-
18 lowed by K.S.A. 79-32,177, and amendments
thereto.
19 (vi) Any amount
of designated employee contributions picked up by
20 an employer pursuant to K.S.A. 12-5005,
20-2603, 74-4919 and 74-4965,
21 and amendments to such sections.
22 (vii) The amount
of any charitable contribution made to the extent
23 the same is claimed as the basis for the
credit allowed pursuant to K.S.A.
24 79-32,196, and amendments thereto.
25 (viii) The amount
of any costs incurred for improvements to a swine
26 facility, claimed for deduction in
determining federal adjusted gross in-
27 come, to the extent the same is claimed as
the basis for any credit allowed
28 pursuant to K.S.A. 1999 Supp. 79-32,204 and
amendments thereto.
29 (ix) The amount
of any ad valorem taxes and assessments paid and
30 the amount of any costs incurred for
habitat management or construction
31 and maintenance of improvements on real
property, claimed for deduc-
32 tion in determining federal adjusted gross
income, to the extent the same
33 is claimed as the basis for any credit
allowed pursuant to K.S.A. 79-32,203
34 and amendments thereto.
35 (c) There shall
be subtracted from federal adjusted gross income:
36 (i) Interest or
dividend income on obligations or securities of any
37 authority, commission or instrumentality of
the United States and its pos-
38 sessions less any related expenses directly
incurred in the purchase of
39 such obligations or securities, to the
extent included in federal adjusted
40 gross income but exempt from state income
taxes under the laws of the
41 United States.
42 (ii) Any amounts
received which are included in federal adjusted
43 gross income but which are specifically
exempt from Kansas income tax-
3
1 ation under the laws of the state of
Kansas.
2 (iii) The
portion of any gain or loss from the sale or other disposition
3 of property having a higher adjusted
basis for Kansas income tax purposes
4 than for federal income tax purposes
on the date such property was sold
5 or disposed of in a transaction in
which gain or loss was recognized for
6 purposes of federal income tax that
does not exceed such difference in
7 basis, but if a gain is considered a
long-term capital gain for federal in-
8 come tax purposes, the modification
shall be limited to that portion of
9 such gain which is included in
federal adjusted gross income.
10 (iv) The amount
necessary to prevent the taxation under this act of
11 any annuity or other amount of income or
gain which was properly in-
12 cluded in income or gain and was taxed
under the laws of this state for a
13 taxable year prior to the effective date of
this act, as amended, to the
14 taxpayer, or to a decedent by reason of
whose death the taxpayer acquired
15 the right to receive the income or gain, or
to a trust or estate from which
16 the taxpayer received the income or
gain.
17 (v) The amount of
any refund or credit for overpayment of taxes on
18 or measured by income or fees or payments
in lieu of income taxes im-
19 posed by this state, or any taxing
jurisdiction, to the extent included in
20 gross income for federal income tax
purposes.
21 (vi) Accumulation
distributions received by a taxpayer as a beneficiary
22 of a trust to the extent that the same are
included in federal adjusted
23 gross income.
24 (vii) Amounts
received as annuities under the federal civil service
25 retirement system from the civil service
retirement and disability fund
26 and other amounts received as retirement
benefits in whatever form
27 which were earned for being employed by the
federal government or for
28 service in the armed forces of the United
States.
29 (viii) Amounts
received by retired railroad employees as a supple-
30 mental annuity under the provisions of 45
U.S.C. 228b (a) and 228c (a)(1)
31 et seq.
32 (ix) Amounts
received by retired employees of a city and by retired
33 employees of any board of such city as
retirement allowances pursuant to
34 K.S.A. 13-14,106, and amendments thereto,
or pursuant to any charter
35 ordinance exempting a city from the
provisions of K.S.A. 13-14,106, and
36 amendments thereto.
37 (x) For taxable
years beginning after December 31, 1976, the amount
38 of the federal tentative jobs tax credit
disallowance under the provisions
39 of 26 U.S.C. 280 C. For taxable years
ending after December 31, 1978,
40 the amount of the targeted jobs tax credit
and work incentive credit dis-
41 allowances under 26 U.S.C. 280 C.
42 (xi) For taxable
years beginning after December 31, 1986, dividend
43 income on stock issued by Kansas Venture
Capital, Inc.
4
1 (xii) For
taxable years beginning after December 31, 1989, amounts
2 received by retired employees of a
board of public utilities as pension and
3 retirement benefits pursuant to
K.S.A. 13-1246, 13-1246a and 13-1249
4 and amendments thereto.
5 (xiii) For
taxable years beginning after December 31, 1993, the
6 amount of income earned on
contributions deposited to an individual
7 development account under K.S.A.
79-32,117h, and amendments thereto.
8 (xiv) For
all taxable years commencing after December 31, 1996, that
9 portion of any income of a bank
organized under the laws of this state or
10 any other state, a national banking
association organized under the laws
11 of the United States, an association
organized under the savings and loan
12 code of this state or any other state, or a
federal savings association or-
13 ganized under the laws of the United
States, for which an election as an
14 S corporation under subchapter S of the
federal internal revenue code is
15 in effect, which accrues to the taxpayer
who is a stockholder of such
16 corporation and which is not distributed to
the stockholders as dividends
17 of the corporation.
18 (xv) For all
taxable years beginning after December 31, 1999,
19 amounts not exceeding $2,000 for each
designated beneficiary which are
20 contributed to a family postsecondary
education savings account estab-
21 lished under the Kansas postsecondary
education savings program for the
22 purpose of paying the qualified higher
education expenses of a designated
23 beneficiary at an institution of
postsecondary education. The terms and
24 phrases used in this paragraph shall have
the meaning respectively as-
25 cribed thereto by the provisions of K.S.A.
1999 Supp. 75-643, and amend-
26 ments thereto, and the provisions of such
section are hereby incorporated
27 by reference for all purposes thereof.
28 (xvi) For all
taxable years commencing after December 31, 1999,
29 amounts, not to exceed $2,000, of the
premium costs for a qualified long-
30 term care insurance contract, as defined
by subsection (b) of section
31 7702B of the federal internal revenue
code.
32 (d) There shall
be added to or subtracted from federal adjusted gross
33 income the taxpayer's share, as beneficiary
of an estate or trust, of the
34 Kansas fiduciary adjustment determined
under K.S.A. 79-32,135, and
35 amendments thereto.
36 (e) The amount of
modifications required to be made under this sec-
37 tion by a partner which relates to items of
income, gain, loss, deduction
38 or credit of a partnership shall be
determined under K.S.A. 79-32,131,
39 and amendments thereto, to the extent that
such items affect federal
40 adjusted gross income of the
partner.
41 Sec. 2. K.S.A. 1999 Supp.
79-32,117 is hereby repealed.
42 Sec. 3. This act shall
take effect and be in force from and after its
43 publication in the statute book.