Brief ⁽¹⁾

SB 45 would make several changes in the statute of limitations relating to income taxes and would make permanent an income tax credit for certain costs associated with plugging abandoned oil and gas wells.

One amendment would clarify that the statute of limitations for assessments be established at three years after the original return was filed or within one year after an amended return was filed, whichever is later.

A second amendment to the statute of limitations for refunds would eliminate the distinction between timely filed returns and late returns and conform state law with federal income tax statute of limitation provisions.

The statute of limitations for both assessments and refunds attributable to federal revenue agent reports would be set at 180 days following receipt of such reports or "within two years of the date the tax claimed to be refunded or against which the credit is claimed was paid," whichever date is later.

An income tax credit equivalent to 50 percent of expenditures incurred in plugging abandoned oil and gas wells would be made permanent beginning with tax year 2001. KSA 79-32,207, which authorized such credits, sunset at the conclusion of tax year 2000.

Background

The original bill was requested for introduction and supported by the Department of Revenue.

The House Committee of the Whole added the provision relating to the income tax credit for plugging abandoned oil and gas wells. The latest fiscal information available suggested that this amendment would be expected to reduce receipts by about $10,000 per year beginning in FY 2002.

1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/fulltext.cgi