Kansas Senate Bill SB103

Kansas 2025-2026 Regular Session

• Introduced: 1/29/25
• Refer: 1/30/25

Caption

Authorizing cities and counties to propose an earnings tax for ballot question and to levy such tax if approved by the electors of a city or county, requiring resubmission of the question, if approved, to the electors every 10 years, allowing certain credits and exemptions against the tax, providing for deductions by public and private employers of the tax from employee earnings and providing that revenue from any such tax be pledged for certain purposes.

Summary

SB 103 would authorize Kansas cities and counties to ask voters whether to adopt a local earnings tax of up to 1% on nonresidents who work within the jurisdiction. A city earnings tax would be pledged for infrastructure purposes, while a county earnings tax would be pledged for general county purposes. In both cases, at least half of the revenue would have to be credited in the local budget to reduce reliance on property tax revenue. The bill also requires that any initial levy be approved by a majority of local electors, and that the question be resubmitted every 10 years after adoption so voters can decide whether to continue the tax. The bill creates a detailed framework for administration and collection. It defines the tax base, excludes certain deferred compensation contributions, allows local governments to provide exemptions and deductions for spouses and dependents, and gives credits for earnings tax paid to another city or county when a nonresident is taxed by more than one jurisdiction. It also requires the state and its political subdivisions to withhold the tax from employee earnings, and allows local governments to require other employers to do the same, with a small collection fee retained by the employer. Employers may also be required to provide employee address lists for collection purposes, and those lists would be confidential and exempt from open records disclosure until at least July 1, 2030 unless extended by the legislature. SB 103 would change existing Kansas law by carving out a new exception to the general prohibition on city and county income taxes. It amends K.S.A. 12-140 and K.S.A. 19-101a so that cities and counties may levy an earnings tax only under the bill’s procedures, while otherwise preserving the statewide ban on local income taxation. The bill also repeals the current versions of those statutes and replaces them with language expressly authorizing the new local tax structure. In practical terms, the measure would give local governments a new revenue tool, but only through direct voter approval and within the bill’s limits. The overall sentiment reflected in the available materials is neutral to supportive in concept, with the bill framed as a local-option tax measure rather than a mandatory statewide tax. Because there are no committee transcripts or recorded votes provided, there is no documented floor or committee debate to indicate broader legislative support or opposition. The structure of the bill suggests an effort to make the proposal more politically acceptable by limiting the rate, requiring voter approval, tying revenue to specific purposes, and requiring periodic reauthorization. The main points of contention likely center on whether Kansas should permit local earnings taxes at all, especially because the tax would apply to nonresidents working in the city or county. Other likely concerns include the administrative burden on employers, the confidentiality of employee information, and the possibility of overlapping local taxes for workers who commute across jurisdictional lines. Supporters would likely emphasize local control, infrastructure and county funding, and property tax relief, while opponents would likely focus on the tax burden on workers and the expansion of local taxing authority.

Impact

The bill would create a new statutory exception allowing cities and counties to levy an earnings tax on nonresident workers, subject to voter approval, a 1% cap, and periodic reauthorization every 10 years. It would amend the existing statutory prohibition on local income taxes in K.S.A. 12-140 and K.S.A. 19-101a, while also establishing rules for credits, exemptions, withholding, employer collection duties, confidentiality of taxpayer lists, and the dedication of revenues to specified local purposes.

Sentiment

No committee transcript or vote history was provided, so there is no direct record of debate or formal support/opposition. Based on the bill text alone, the measure appears designed to be politically moderated through voter approval, a tax cap, and earmarked uses of revenue, suggesting an attempt to build support while addressing concerns about local taxing power.

Contention

Likely points of contention include the expansion of local taxing authority, the impact on commuters and other nonresident workers, and the administrative burden placed on employers and public payroll systems. Privacy concerns may also arise from the requirement that employers provide employee address lists, even though the bill makes those records confidential. Supporters would likely favor the bill for local revenue generation and property tax relief, while opponents may object to a new tax on earned income and the potential for multiple local jurisdictions to tax the same worker.