Kansas House Bill HB2377

Kansas 2025-2026 Regular Session

• Introduced: 2/11/25
• Refer: 2/11/25
• Report Pass: 3/19/25
• Engrossed: 3/21/25
• Refer: 3/25/25

Caption

Providing that countywide retailers' sales tax is apportioned based on tangible property tax levies remain unchanged until December 31, 2026.

Summary

HB 2377 changes how countywide retailers’ sales tax revenue is divided among counties and cities in Kansas. Under current law, part of the revenue is apportioned using the prior year’s tangible property tax levies, and part is apportioned by population. This bill revises the property-tax-based portion so that it is calculated using total assessed valuations used to determine ad valorem property taxes, rather than the amount of property taxes actually levied. The bill also keeps in place several special apportionment rules for Johnson, Montgomery, Phillips, and certain other countywide sales tax arrangements, including provisions that require some revenues to be retained by the county for the pledged purpose of the tax. The measure amends K.S.A. 2024 Supp. 12-192 and repeals the existing version of that statute. Its practical effect is to alter the formula used to distribute countywide sales tax receipts to counties and cities, which can affect local government revenue shares, budgeting, and the extent to which cities and counties receive sales tax proceeds for general funds or pledged projects. It also preserves existing exceptions for certain counties and redevelopment-bond-related revenues under K.S.A. 74-8929. The overall sentiment around the bill appears strongly favorable, at least in the House, where it passed emergency final action 118-0. The unanimous vote suggests broad support and little visible opposition in the recorded voting history. The bill caption also indicates a policy goal of keeping the apportionment method tied to tangible property tax levies unchanged through December 31, 2026, which is consistent with a technical or transitional adjustment rather than a controversial policy shift. No committee transcript was provided, so there is no recorded debate to identify detailed arguments for or against the bill. Based on the text, any contention would likely center on how the revised formula redistributes sales tax revenue between counties and cities, and whether using assessed valuation instead of levied taxes changes local government shares in a way that benefits some jurisdictions over others. Counties and cities that rely on these distributions would be the primary affected parties.

Impact

HB 2377 amends Kansas law governing the apportionment of countywide retailers’ sales tax revenue under K.S.A. 12-192. The bill changes the property-tax-based allocation factor from total tangible property tax levies to total assessed valuations used to calculate ad valorem property taxes, while leaving the population-based allocation and several county-specific exceptions largely intact. It affects how sales tax receipts are distributed to county and city treasurers, and therefore may alter local general fund revenues and pledged-use revenues for participating local governments.

Sentiment

The recorded sentiment is overwhelmingly positive. The House passed the bill on emergency final action by a vote of 118-0, indicating unanimous support among those voting. No committee discussion was provided, but the vote suggests the bill was viewed as a noncontroversial adjustment to local tax apportionment rules.

Contention

The main potential point of contention is the revenue distribution formula itself: shifting from property tax levies to assessed valuations could change the relative shares received by counties and cities, especially where tax rates and assessed values do not move together. Local governments that would receive less under the revised formula could object, while those that benefit may support it. Additional complexity comes from the bill’s preservation of special rules for Johnson, Montgomery, Phillips, and redevelopment-related sales taxes, which means the impact is not uniform across all counties.