 WICHITA, KANSAS Kansas Tax Reduction and Reform Act of 1998 The Kansas Tax Reduction and Reform Act passed by the 1998 legislature produced income tax, property tax and sales tax changes beneficial to Kansas taxpayers. The changes have been billed as resulting in $247 million in aggregate tax reductions. The Kansas income tax rates have been equalized for single and married taxpayers effective January 1, 1998. The 1998 legislature accelerated tax cuts for single taxpayers which were previously scheduled to occur in 1999 and 2000. The new Single and Head of Household rate schedule is:
The personal exemption amount for all taxpayers is increased from $2,000 to $2,250, effective for 1998 and following years. The standard deduction for married taxpayers filing joint returns is raised from $5,000 to $6,000 for 1998 and following years. The standard deduction for head of household is increased to $4,500 from $4,400 for 1998 and following years. The standard deduction for single taxpayers remains at $3,000. The additional standard deduction for taxpayers age 65 or older and/or blind is raised by $100. For 1998 and following years, the additional standard deduction for single and head of household filing status is $850; for married filing status, the additional standard deduction is $700. A new refundable income tax credit equal to 15% of property taxes paid on commercial and industrial machinery and equipment used by businesses is allowed for tax years beginning after 1997. Machinery and equipment does not include motor vehicles, residential mobile homes and public utility tangible personal property. The credit is allowed against the personal income tax, the corporate income tax, the insurance company premiums tax and the financial institutions privilege tax. For pass-through entities (S corporations, partnerships and limited liability companies), the credit is allocated proportionately to the owners. With respect to property tax reductions, the statewide mandatory school finance property tax mill levy was reduced from 27 mills to 20 mills for the 1998-1999 and 1999-2000 school years. As recently as 1995 this levy stood at 35 mills. The exemption of $20,000 of appraised value for residential property from the school finance property tax is extended an additional year through 1999. On the sales tax front, a whole host of new sales tax exemptions, many benefitting nonprofit organizations, were implemented. The foregoing article has been prepared by Bever Dye, LC, as a service to our clients for informational purposes only and does not constitute legal advice. It is designed to provide general information concerning recent developments and topics of interest in the areas of tax and estate planning law. Do not take action in reliance on items contained in this article without obtaining the advice of an attorney. |