BANKS, BANKING BUSINESSES, TRUST COMPANIES AND SAVINGS AND LOAN ASSOCIATIONS
K.S.A. ch. 79, art. 11
in effectK.S.A. 79-1101a
K.S.A. 79-1101c
K.S.A. 79-1102
K.S.A. 79-1103
K.S.A. 79-1104, 79-1105
K.S.A. 79-1105a
K.S.A. 79-1105b
K.S.A. 79-1105c Taxation of the business of banking; prohibiting certain taxes; right to protest payment of taxes.
79-1105c. Taxation of the business of banking; prohibiting certain taxes; right to protest payment of taxes.
(a) No taxes shall be levied under the provisions of K.S.A. 79-1103 and 79-1105a , and amendments thereto, for taxable year 1995 and any year thereafter.
(b) No county appraiser shall initiate, open, reopen or continue any audit, investigation or examination of the assessment of any taxes under the provisions of K.S.A. 79-1103 or 79-1105a , and amendments thereto, for any taxable year prior to January 1, 1995.
(c) No county appraiser shall adjust, alter, modify or otherwise change the amount of taxes assessed under the provisions of K.S.A. 79-1103 or 79-1105a , and amendments thereto, against any person or entity for any taxable year prior to January 1, 1995.
(d) Nothing herein shall affect the rights of any taxpayer to protest the payment of taxes assessed pursuant to K.S.A. 79-1103 or 79-1105a , and amendments thereto, in accordance with K.S.A. 79-2005 , and amendments thereto.
L. 1995, ch. 130, § 1; April 20.
K.S.A. 79-1106 Taxation of national banking associations, banks, trust companies and savings and loan associations; purpose of act.
79-1106. Taxation of national banking associations, banks, trust companies and savings and loan associations; purpose of act.
It is hereby declared to be the intention of the legislature to levy a tax on national banking associations, banks, trust companies, federally chartered savings banks and savings and loan associations, which tax shall be in lieu of ad valorem taxes which might otherwise be imposed upon the intangible assets of such national banking associations, banks, trust companies, federally chartered savings banks and savings and loan associations.
L. 1963, ch. 463, § 1; L. 1996, ch. 270, § 7; July 1.
Cross References to Related Sections:
Tax credit for investment in stock of Kansas Venture Capital, Inc., see 74-8205.
K.S.A. 79-1107 National banking associations and state banks; computation of tax; rate of imposed.
79-1107. National banking associations and state banks; computation of tax; rate of imposed.
(a) Every national banking association and state bank located or doing business within the state shall pay to the state for the privilege of doing business within the state a tax according to or measured by its net income for the next preceding taxable year to be computed as provided in this act. Such tax shall consist of a normal tax and a surtax and shall be computed as follows unless otherwise modified pursuant to K.S.A. 2025 Supp. 79-32,110c , and amendments thereto:
(1) For tax year 2024, and all tax years thereafter, the normal tax shall be an amount equal to 1.94% of such net income; and
(2) the surtax shall be an amount equal to 2.125% of such net income in excess of $25,000.
(b) The tax levied shall be in lieu of ad valorem taxes which might otherwise be imposed by the state or political subdivisions thereof upon shares of capital stock or the intangible assets of national banking associations and state banks.
L. 1963, ch. 463, § 2; L. 1968, ch. 142, § 1; L. 1970, ch. 382, § 1; L. 1972, ch. 359, § 1; L. 1979, ch. 314, § 1; L. 1987, ch. 374, § 1; L. 1996, ch. 270, § 9; L. 1998, ch. 194, § 2; L. 2024, ch. 1, § 12 (Special Session); L. 2025, ch. 116, § 2; July 1.
Source or prior law:
79-1101, 79-1101c.
Cross References to Related Sections:
Tax credit for investment in stock of Kansas Venture Capital, Inc., see 74-8205.
Adjustment of tax rates, see 79-32,110c.
Attorney General's Opinions:
Tangible personal property of bank is not exempt from taxation. 87-32.
National and state banks; tax imposed; net income defined. 94-156.
CASE ANNOTATIONS
1. Bank and holding company not treated as unitary business for privilege tax purposes. First Nat'l Bank of Manhattan v. Kansas Dept. of Revenue, 13 Kan. App. 2d 706, 707, 779 P.2d 457 (1989).
2. Net operating loss sustained by bank in year bank ceased operation may be carried back to redetermine privilege tax liability for prior years. In re Tax Appeal of Federal Deposit Ins. Corp., 249 Kan. 752, 754, 822 P.2d 627 (1991).
K.S.A. 79-1108 Trust companies and savings and loan associations; tax computation of; rate of imposed.
79-1108. Trust companies and savings and loan associations; tax computation of; rate of imposed.
(a) Every trust company and savings and loan association located or doing business within the state shall pay to the state for the privilege of doing business within the state a tax according to or measured by its net income for the next preceding taxable year to be computed as provided in this act. Such tax shall consist of a normal tax and a surtax and shall be computed as follows unless otherwise modified pursuant to K.S.A. 2025 Supp. 79-32,110c , and amendments thereto:
(1) For tax year 2024, and all tax years thereafter, the normal tax on every trust company and savings and loan association shall be an amount equal to 1.93% of such net income; and
(2) the surtax on every trust company and savings and loan association shall be an amount equal to 2.25% of such net income in excess of $25,000.
(b) The tax levied shall be in lieu of ad valorem taxes which might otherwise be imposed by the state or political subdivision thereof upon shares of capital stock or other intangible assets of trust companies and savings and loan associations.
L. 1963, ch. 463, § 3; L. 1968, ch. 142, § 2; L. 1970, ch. 382, § 2; L. 1972, ch. 359, § 2; L. 1987, ch. 374, § 2; L. 1998, ch. 194, § 3; L. 2024, ch. 1, § 13 (Special Session); L. 2025, ch. 116, § 3; July 1.
Source or prior law:
79-325a, 79-1101, 79-1101c.
Cross References to Related Sections:
Tax credit for investment in stock of Kansas Venture Capital, Inc., see 74-8205.
Adjustment of tax rates, see 79-32,110c.
Attorney General's Opinions:
National and state banks; tax imposed; net income defined. 94-156.
K.S.A. 79-1108a
K.S.A. 79-1109 "Net income" defined; deductions.
79-1109. "Net income" defined; deductions.
(a) As used in this act, "net income" means the Kansas taxable income of corporations as defined in K.S.A. 79-32,138 , and amendments thereto, determined without regard to the provisions of K.S.A. 79-32,139 , and amendments thereto, and the provisions of K.S.A. 79-32,117 (c)(xiv), and amendments thereto, plus income received from obligations or securities of the United States or any authority, commission or instrumentality of the United States and its possessions to the extent not included in Kansas taxable income of a corporation and income received from obligations of this state or a political subdivision of this state that is exempt from income tax under the laws of this state, less dividends received from stock issued by Kansas venture capital, inc. to the extent such dividends are included in the Kansas taxable income of a corporation, interest paid on time deposits or borrowed money and dividends paid on withdrawable shares of savings and loan associations to the extent not deducted in arriving at Kansas taxable income of a corporation.
(b) Savings and loan associations shall be allowed as a deduction from net income, as defined in subsection (a), a reserve established for the sole purpose of meeting or absorbing losses, in the amount of 5% of such net income determined without benefit of such deduction, but no further deduction shall be allowed for losses when actually sustained and charged against such reserve, unless such reserve shall have been fully absorbed thereby; or, in the alternative, a reasonable addition to a reserve for losses based on past experience, under such rules and regulations as the secretary of revenue may prescribe.
(c) For all taxable years commencing after December 31, 2022, national banking associations, state banks, trust companies and savings and loan associations shall be allowed as a deduction from net income, as defined in subsection (a), the net interest income received from qualified agricultural real estate loans attributed to Kansas and the net interest income received from single family residence loans attributed to Kansas to the extent such interest is included in the Kansas taxable income of a corporation. As used in this subsection:
(1) "Interest" means interest on indebtedness attributed to Kansas and incurred in the ordinary course of the active conduct of any business and interest on indebtedness incurred that is secured by a single family residence;
(2) "qualified agricultural real estate loans" means loans made on real property that is substantially used for the production of one or more agricultural products and that:
(A) Have maturities of not less than five years and not more than 40 years;
(B) are secured by a first lien interest in real estate, except that the loans may be secured by a second lien interest if the institution also holds the first lien on the property; and
(C) have an outstanding loan balance when made that is less than 85% of the appraised value of the real estate, except that a loan for which private mortgage insurance is obtained may exceed 85% of the appraised value of the real estate to the extent the loan amount in excess of 85% is covered by such insurance;
(3) "single family residence" means a residence that:
(A) Is the principal residence of its occupant;
(B) is located in Kansas, in a rural area as defined by the United States department of agriculture that is not within a metropolitan statistical area and has a population of 2,500 or less as determined by the most recent census for which data is available; and
(C) is purchased or improved with the proceeds of the loan;
(4) "net interest income received from qualified agricultural real estate loans attributed to Kansas" means the product of the ratio of the interest income earned on qualified agricultural real estate loans over total interest income earned, in relation to the net income of the national banking association, state bank, trust company or savings and loan association without regard to this deduction; and
(5) "net interest income received from single family residence loans attributed to Kansas" means the product of the ratio of the interest income earned on single family residence loans over total interest income earned, in relation to the net income of the national banking association, state bank, trust company or savings and loan association without regard to this deduction.
L. 1963, ch. 463, § 4; L. 1967, ch. 488, § 1; L. 1972, ch. 359, § 3; L. 1979, ch. 314, § 2; L. 1986, ch. 332, § 7; L. 1987, ch. 374, § 3; L. 1997, ch. 120, § 1; L. 2021, ch. 2, § 10; July 1.
Cross References to Related Sections:
Investment in Kansas Venture Capital, Inc., see 74-8203.
Attorney General's Opinions:
National and state banks; tax imposed; net income defined. 94-156.
CASE ANNOTATIONS
1. Filing of consolidated federal income tax return by bank and holding company as not necessitating consolidated state return examined. First Nat'l Bank of Manhattan v. Kansas Dept. of Revenue, 13 Kan. App. 2d 706, 713, 779 P.2d 457 (1989).
2. Net operating loss sustained by bank in year bank ceased operation may be carried back to redetermine privilege tax liability for prior years. In re Tax Appeal of Federal Deposit Ins. Corp., 249 Kan. 752, 753, 754, 822 P.2d 627 (1991).
K.S.A. 79-1109a Application of K.S.A. 79-1107 and 79-1109.
79-1109a. Application of K.S.A. 79-1107 and 79-1109.
The provisions of K.S.A. 79-1107 and 79-1109 shall be applicable to all taxable years commencing after December 31, 1979.
L. 1979, ch. 314, § 10; July 1.
K.S.A. 79-1110 Taxation of national banking associations, banks, trust companies and savings and loan associations; procedure for returns; tax payment; laws applicable.
79-1110. Taxation of national banking associations, banks, trust companies and savings and loan associations; procedure for returns; tax payment; laws applicable.
Every national banking association, bank, trust company, and savings and loan association subject to taxation under this act shall make its return and pay the tax imposed to the director of taxation on or before the 15 th day of the fourth month following the close of its federal taxable year, in the same manner, except for computing the net income subject to tax, as corporations are required to make their returns and pay their taxes under the Kansas income tax act. Every such national banking association, bank, trust company and savings and loan association shall be subject to other provisions of the Kansas income tax act applicable to other corporations and shall be subject to the penalties imposed on corporations by K.S.A. 79-3222 , 79-3228 and 79-3234 insofar as the same can be made applicable.
L. 1963, ch. 463, § 5; L. 1980, ch. 309, § 1; L. 1981, ch. 377, § 1; April 16.
CASE ANNOTATIONS
1. Filing of consolidated federal income tax return by bank and holding company as not necessitating consolidated state return examined. First Nat'l Bank of Manhattan v. Kansas Dept. of Revenue, 13 Kan. App. 2d 706, 710, 779 P.2d 457 (1989).
2. Net operating loss sustained by bank in year bank ceased operation may be carried back to redetermine privilege tax liability for prior years. In re Tax Appeal of Federal Deposit Ins. Corp., 249 Kan. 752, 757, 822 P.2d 627 (1991).
K.S.A. 79-1110a Application of K.S.A. 79-1110.
79-1110a. Application of K.S.A. 79-1110.
The provisions of this act shall be applicable to all taxable years commencing after December 31, 1979.
L. 1980, ch. 309, § 2; July 1.
K.S.A. 79-1111 Same; administration of act; rules and regulations.
79-1111. Same; administration of act; rules and regulations.
The director of taxation shall administer this act. The secretary of revenue shall adopt rules and regulations for the administration of this act.
L. 1963, ch. 463, § 6; L. 1972, ch. 342, § 90; July 1.
K.S.A. 79-1112 Disposition of tax moneys; privilege tax refund fund established; refunds.
79-1112. Disposition of tax moneys; privilege tax refund fund established; refunds.
(a) The director of taxation shall remit all tax moneys collected under the provisions of this act to the state treasurer in accordance with the provisions of K.S.A. 75-4215 , and amendments thereto, less amounts set apart in the privilege tax refund fund in the manner provided in subsection (b). Upon receipt of each such remittance, the state treasurer shall deposit the entire amount in the state treasury to the credit of the state general fund.
(b) A fund designated as the privilege tax refund fund shall be set apart and maintained by the director from the tax moneys collected under the provisions of this act and held by the state treasurer for prompt payment of all "privilege tax" refunds. The fund shall be in such amount as the director determines is necessary to meet current refunding requirements under this act. In the event such fund is at any time insufficient to provide for the payment of refunds due claimants thereof, the director shall certify the amount of additional funds required to the director of accounts and reports, who shall promptly transfer the required amount from the state general fund to the privilege tax refund fund and notify the state treasurer, who shall make proper entry in the records.
(c) If the director discovers from the examination of the return, or upon claim duly filed by the taxpayer or upon final judgment of the court that the tax imposed by this act, or any penalty or interest paid by or credited to any taxpayer is in excess of the amount legally due, the director shall certify to the director of accounts and reports the name of the taxpayer, the amount of refund and such other information as the director may require. Upon receipt of such certification, the director of accounts and reports shall issue a warrant on the state treasurer for the payment to the taxpayer out of the fund provided in subsection (b), except that no refund shall be made for a sum less than $5, but such amount may be claimed by the taxpayer as a credit against the taxpayer's tax liability in the taxpayer's next succeeding year.
L. 1963, ch. 463, § 7; L. 1972, ch. 361, § 1; L. 1979, ch. 315, § 1; L. 1983, ch. 315, § 1; L. 1984, ch. 351, § 5; L. 2001, ch. 5, § 443; July 1.
K.S.A. 79-1113 National banking associations and banks and corporations holding stock therein; exemption from intangibles tax.
79-1113. National banking associations and banks and corporations holding stock therein; exemption from intangibles tax.
Shares, shares of stock or other evidence of ownership of national banking associations and banks located or doing business within the state, and all income therefrom and the shares, shares of stock or other evidence of ownership of corporations holding stock of a national banking association or bank located or doing business in Kansas, to the extent the income of such corporation is attributable to dividends received on such stock, and all income therefrom, shall be exempt from the tax imposed on moneys, notes and other evidences of debt by K.S.A. 79-3109 and any amendments thereof.
L. 1963, ch. 463, § 8; L. 1970, ch. 390, § 2; July 1.
Cross References to Related Sections:
Tax credit for investment in stock of Kansas Venture Capital, Inc., see 74-8205.
CASE ANNOTATIONS
1. Exemption from intangibles tax satisfies both Kansas and U.S. Constitutions. Von Ruden v. Miller, 231 Kan. 1, 2, 3, 4, 13, 14, 642 P.2d 91 (1982).
K.S.A. 79-1114
K.S.A. 79-1115 Application of K.S.A. 79-1107 and 79-1108.
79-1115. Application of K.S.A. 79-1107 and 79-1108.
The provisions of this act shall be applicable to all taxable years commencing after December 31, 1970.
L. 1970, ch. 382, § 3; July 1.
K.S.A. 79-1116 Application of K.S.A. 79-1107, 79-1108 and 79-1109.
79-1116. Application of K.S.A. 79-1107, 79-1108 and 79-1109.
The provisions of this act shall be applicable to all taxable years commencing after December 31, 1972.
L. 1972, ch. 360, § 1; July 1.
K.S.A. 79-1117 Credit against tax for making certain property used in trade or business or held for production of income accessible to persons with a disability; amount; carryover to subsequent taxable years.
79-1117. Credit against tax for making certain property used in trade or business or held for production of income accessible to persons with a disability; amount; carryover to subsequent taxable years.
Any taxpayer who makes expenditures for the purpose of making all or any portion of an existing building or facility accessible to persons with a disability, which building or facility is on real property located in this state and used in a trade or business or held for the production of income, shall be entitled to claim a tax credit in an amount equal to 50% of such expenditures or, the amount of $10,000, whichever is less, against the tax liability imposed against such taxpayer pursuant to K.S.A. 79-1106 to 79-1116 , inclusive, and amendments thereto. Such tax credit shall be deducted from the taxpayer's tax liability for the taxable year following the year in which the expenditures are made by the taxpayer. If the amount of such tax credit exceeds the taxpayer's tax liability for such taxable year, the amount thereof which exceeds such tax liability may be carried over for deduction from the taxpayer's tax liability in the next succeeding taxable year or years until the total amount of the tax credit has been deducted from tax liability, except that no such tax credit shall be carried over for deduction after the fourth taxable year succeeding the taxable year in which the expenditures are made.
L. 1978, ch. 409, § 5; L. 1994, ch. 173, § 2; July 1.
K.S.A. 79-1118
K.S.A. 79-1119 Reports, statements, lists and returns; preservation; confidentiality, exceptions; performance of certain activities by administrative personnel unlawful; penalties for violations.
79-1119. Reports, statements, lists and returns; preservation; confidentiality, exceptions; performance of certain activities by administrative personnel unlawful; penalties for violations.
(a) All reports, statements, lists and returns required under the provisions of article 11 of chapter 79 of the Kansas Statutes Annotated, and amendments thereto, shall be preserved for three years and thereafter until the director of taxation orders them to be destroyed.
(b) Except in accordance with proper judicial order, or as provided in subsection (c) or K.S.A. 46-1106 , and amendments thereto, it shall be unlawful for the director of taxation, or any deputy, agent, clerk or other officer, employee or former employee of the department of revenue or any other state officer or employee or former state officer or employee to divulge, or to make known in any way, the amount of income or any particulars set forth or disclosed in any report, statement, list, return, federal return or federal return information required under the provisions of article 11 of chapter 79 of the Kansas Statutes Annotated, and amendments thereto; and it shall be unlawful for the director of taxation, or any deputy, agent, clerk or other officer or employee of the department of revenue engaged in the administration of the tax imposed under the provisions of article 11 of chapter 79 of the Kansas Statutes Annotated, and amendments thereto, to engage in the business or profession of tax accounting or to accept employment, with or without consideration, for any person, firm or corporation for the purpose, directly or indirectly, or preparing tax returns or reports required by the laws of the state of Kansas, by any other state or by the United States government, or to accept any employment for the purpose of advising, preparing material or data, or the auditing of books or records to be used in an effort to defeat or cancel any tax or part thereof that has been assessed by the state of Kansas, any other state or by the United States government.
(c) The secretary or the secretary's designee may:
(1) Publish statistics, so classified as to prevent the identification of particular reports or returns and the items thereof;
(2) allow the inspection of returns by the attorney general or other legal representatives of the state;
(3) provide the post auditor access to all statements, lists, reports or returns in accordance with and subject to the provisions of K.S.A. 46-1106 (g), and amendments thereto; or
(4) disclose to the secretary of commerce specific taxpayer information related to financial information previously submitted by the taxpayer to the secretary of commerce concerning or relevant to any privilege tax credits, for purposes of verification of such information or evaluating the effectiveness of any tax credit program administered by the secretary of commerce.
(d) Any person receiving information under the provisions of subsection (c) shall be subject to the confidentiality provisions of subsection (b) and to the penalty provisions of subsection (e).
(e) Any violation of subsection (b) or (c) shall be a class A misdemeanor; and if the offender be an officer or employee of the state, such officer or employee shall be dismissed from office.
(f) Notwithstanding the provisions of this section, the secretary of revenue may, in his or her discretion, permit the commissioner of internal revenue of the United States, or the proper official of any state imposing an income tax or privilege tax on financial institutions, or the authorized representative of either, to inspect the reports, statements, lists or returns made under the provisions of article 11 of chapter 79 of the Kansas Statutes Annotated, and amendments thereto, and the secretary of revenue may make available or furnish to the taxing officials of any other state or the commissioner of internal revenue of the United States or other taxing officials of the federal government, or their authorized representatives, information contained in statements, lists, reports, or returns or any audit thereof or the report of any investigation made with respect thereto, filed pursuant to any of the provisions of article 11 of chapter 79 of the Kansas Statutes Annotated, and amendments thereto, as the secretary may consider proper, but such information shall not be used for any other purpose than that of the administration of tax laws of such state or of the United States.
L. 1979, ch. 314, § 9; L. 1994, ch. 188, § 2; L. 2005, ch. 110, § 3; L. 2023, ch. 66, § 71; July 1.
K.S.A. 79-1120 Recapture tax; definitions.
79-1120. Recapture tax; definitions.
As used in K.S.A. 79-1120 to 79-1125 , unless the context otherwise requires: (a) "Refund" means a reimbursement by the director of taxation of taxes paid pursuant to the provisions of K.S.A. 79-1106 et seq., including any interest accrued thereon, which reimbursement is made pursuant to a judicial order of any court of competent jurisdiction finding that: (1) Any of the provisions of K.S.A. 79-1106 et seq. is discriminatory in a manner prohibited under 31 U.S.C. § 742; or (2) any of the provisions of K.S.A. 79-1106 et seq. is unconstitutional; or (3) that the tax imposed under K.S.A. 79-1107 or K.S.A. 79-1108 is otherwise invalid;
(b) "Aggregate recapture rate" means one hundred percent (100%) plus the percentage determined by the director of taxation to equal the proportion that income received from securities and obligations of the United States or authorities, commissions or instrumentalities thereof by all institutions subject to taxation under the provisions of K.S.A. 79-1106 et seq. bears to the total federal income received by all such institutions during the period or periods for which refunds are paid;
(c) "Claimant's adjustment factor" means a percentage determined by the director of taxation to equal the proportion that income received from securities and obligations of the United States or authorities, commissions or instrumentalities thereof by the institution receiving the refund bears to the total federal income of such institution during the period or periods for which the refund was received.
L. 1979, ch. 314, § 3; July 1.
Attorney General's Opinions:
Without Johnson County Commissioner's approval of Oz Entertainment Company's redevelopment plan, Kansas Development Finance Authority cannot issue bonds. 2001-46.
K.S.A. 79-1121 Same; imposition; computation of amount.
79-1121. Same; imposition; computation of amount.
A recapture tax, in an amount computed as herein provided, shall be imposed on any refund, as defined in K.S.A. 79-1120 , received by any national banking association, state bank, trust company or savings and loan association, in the year in which such refund is received. The amount of such tax shall be computed as follows:
(a) Multiply the amount of the refund received by the aggregate recapture rate;
(b) Multiply the amount of the refund received by the claimant's adjustment factor;
(c) Subtract the product obtained under subsection (b) from the product obtained under subsection (a);
(d) The tax shall be in an amount equal to the lesser of the amount determined in subsection (c) or the amount of the refund.
L. 1979, ch. 314, § 4; July 1.
K.S.A. 79-1122 Same; time for assessment and payment; penalties.
79-1122. Same; time for assessment and payment; penalties.
The tax imposed under K.S.A. 79-1121 shall be assessed by the director of taxation within sixty (60) days of the payment of a refund. Every national banking association, state bank, trust company or savings and loan association liable for the payment of the tax imposed in K.S.A. 79-1121 , shall make payment thereof within thirty (30) days of the date of assessment; and each shall be subject to the penalties imposed on corporations by K.S.A. 79-3228 and K.S.A. 79-3234 insofar as the same can be made applicable.
L. 1979, ch. 314, § 5; July 1.
K.S.A. 79-1123 Administration of act; rules and regulations.
79-1123. Administration of act; rules and regulations.
The director of taxation shall administer this act. The secretary of revenue may adopt rules and regulations for the administration of this act.
L. 1979, ch. 314, § 6; July 1.
K.S.A. 79-1124 Same; disposition of moneys; refunds.
79-1124. Same; disposition of moneys; refunds.
(a) The director of taxation shall remit all tax moneys collected under the provisions of K.S.A. 79-1120 to 79-1125 , and amendments thereto, to the state treasurer in accordance with the provisions of K.S.A. 75-4215 , and amendments thereto. Upon receipt of each such remittance, the state treasurer shall deposit the entire amount in the state treasury to the credit of the state general fund.
(b) Any refunds of tax paid pursuant to K.S.A. 79-1121 , and amendments thereto, shall be made from the privilege tax refund fund created in K.S.A. 79-1112 , and amendments thereto.
L. 1979, ch. 314, § 7; L. 2001, ch. 5, § 444; July 1.
K.S.A. 79-1125
K.S.A. 79-1126 Credit against tax for interest rate reduction for agricultural production loan.
79-1126. Credit against tax for interest rate reduction for agricultural production loan.
(a) On and after the effective date of this act and prior to July 1, 1990, a state bank or national banking association which extends or renews an agricultural production loan under the provisions of this act to an eligible agricultural borrower at an interest rate which is at least one whole percentage point less than the prime interest rate then specified by the bank on such loans with equivalent collateral, and a state bank or national banking association which reduces the rate of interest being charged on any outstanding agricultural production loan to an eligible agricultural borrower by at least one whole percentage point shall receive a credit against its tax liability pursuant to K.S.A. 79-1106 et seq., for taxable years commencing after December 31, 1987, to the extent hereinafter provided. Such tax credit shall be allowed for such interest rate reductions upon agricultural production loans having a total principal amount not exceeding 15% of the amount of such loans reflected in the bank's report of condition filed with the federal deposit insurance corporation as of December 31, 1985.
(b) For the purposes of this section, the term "eligible agricultural borrower" means any person, partnership or family farm corporation, as defined in K.S.A. 17-5903 , and amendments thereto, located in the state of Kansas, having an agricultural production loan which has been classified as substandard or doubtful by any banking regulator, the farm credit administration or a district farm credit system institution which is subject to review by the farm credit administration.
(c) An interest rate reduction may be applied under the provisions of this section only when the eligible borrower can be reasonably expected to service the principal and interest for the term of such person's loan.
(d) The total credit against tax liability shall be the amount by which the interest income to the state bank or national banking association on and after the effective date of this act and prior to July 1, 1990, has been reduced on such loans because of such reductions in rates of interest, except that the credit allowed as a result of an interest rate reduction on any one agricultural production loan shall not exceed an amount equal to 3% per annum on the unpaid principal balance of the loan. The tax credit allowed for any taxable year shall not exceed ⅕ of the total tax credit of the bank allowed under this act. Unused tax credit shall be carried forward as a credit to the bank's tax liability in each subsequent taxable year and shall then be taken into account, subject to the limitation that the credit in any one taxable year may not exceed ⅕ of the total tax credit.
L. 1986, ch. 367, § 1; L. 1987, ch. 54, § 15; L. 1988, ch. 376, § 1; L. 1989, ch. 292, § 1; April 18.
K.S.A. 79-1126a Credit against tax for interest rate reductions on certain agricultural production loans.
79-1126a. Credit against tax for interest rate reductions on certain agricultural production loans.
(a) On and after the effective date of this act and prior to July 1, 2004, a state bank or national banking association which extends or renews an agricultural production loan under the provisions of this section to an eligible agricultural borrower at an interest rate which is at least one whole percentage point less than the prime interest rate then specified by the bank on such loans with equivalent collateral, and a state bank or national banking association which reduces the rate of interest being charged on any outstanding agricultural production loan to an eligible agricultural borrower by at least one whole percentage point shall receive a credit against its tax liability pursuant to K.S.A. 79-1106 et seq., and amendments thereto, for taxable years commencing after December 31, 1999, to the extent hereinafter provided. Such tax credit shall be allowed for such interest rate reductions upon agricultural production loans having a total principal amount not exceeding 15% of the amount of such loans reflected in the bank's report of condition filed with the federal deposit insurance corporation as of December 31, 1999.
(b) For the purposes of this section, the term "eligible agricultural borrower" means any person, limited agricultural partnership, limited liability agricultural company or family farm corporation, as defined in K.S.A. 17-5903 , and amendments thereto, located in the state of Kansas, having an agricultural production loan which has been classified as substandard or doubtful: (1) By any banking regulator, the farm credit administration or a district farm credit system institution which is subject to review by the farm credit administration; or (2) by the designated loan committee of such banking association prior to examination for classification eligibility by the banking regulator, the farm credit administration or a district farm credit system institution which is subject to review by the farm credit administration.
(c) An interest rate reduction may be applied under the provisions of this section only when the eligible borrower can be reasonably expected to service the principal and interest for the term of such person's loan.
(d) The total credit against tax liability shall be the amount by which the interest income to the state bank or national banking association on and after the effective date of this act and prior to July 1, 2004, has been reduced on such loans because of such reductions in rates of interest, except that the credit allowed as a result of an interest rate reduction on any one agricultural production loan shall not exceed an amount equal to 3% per annum on the unpaid principal balance of the loan. The tax credit allowed for any taxable year shall not exceed 1 / 5 of the total tax credit of the bank allowed under this section. Unused tax credit shall be carried forward as a credit to the bank's tax liability in each subsequent taxable year and shall then be taken into account, subject to the limitation that the credit in any one taxable year may not exceed 1 / 5 of the total tax credit.
L. 2000, ch. 101, § 10; April 27.
Cross References to Related Sections:
Ineligible loans, see 75-4275.
K.S.A. 79-1127 Estimated tax; manner of payment; penalties.
79-1127. Estimated tax; manner of payment; penalties.
(a) Every national banking association, bank, trust company, and savings and loan association subject to taxation under article 11 of chapter 79 of the Kansas Statutes Annotated whose tax liability can reasonably be expected to exceed $500 shall pay estimated tax in the same manner as a corporation subject to the provisions of K.S.A. 79-32,101 et seq. Such payment shall be made in the manner provided in K.S.A. 79-32,103 and shall be allowed as a credit against the tax imposed by this act.
(b) A penalty at the same rate per annum prescribed by subsection (b) of K.S.A. 79-2968 , and amendments thereto, for interest upon delinquent or unpaid taxes shall be applied and added to a taxpayer's amount of underpayment of estimated tax due from the date the estimated tax payment was due until the same is paid or until the 15 th day of the fourth month following the close of the taxable year for which such estimated tax is a credit, whichever date is earlier, but such penalty shall not be added if the total amount thereof does not exceed $5. For purposes of this subsection, the amount of underpayment of estimated tax shall be the excess of the amount of the installment which would be required to be paid if the estimated tax were equal to 90% of the tax shown on the return for the taxable year or, if no return was filed, 90% of the tax for such year, over the amount, if any, of the installment paid on or before the last date prescribed for payment.
(c) No penalty shall be imposed upon any taxpayer subject to the provisions hereof if the total amount of all payments of estimated tax made on or before the last date prescribed for payment of such installment equals or exceeds the amount which would have been required to be paid on or before such date if the estimated tax were whichever of the following is the least:
(1) The tax shown on the return of the taxpayer for the preceding taxable year, if a return was filed by the taxpayer for the preceding taxable year and such preceding year was a taxable year of 12 months; or
(2)(A) an amount equal to 90% of the tax for the taxable year computed by placing on an annualized basis the taxable income: (i) For the first three months of the taxable year, in the case of the installment required to be paid in the fourth month; (ii) for the first three months or for the first five months of the taxable year, in the case of the installment required to be paid in the sixth month; (iii) for the first six months or for the first eight months of the taxable year in the case of the installment required to be paid in the ninth month; and (iv) for the first nine months or for the first 11 months of the taxable year, in the case of the installment required to be paid in the 12 th month of the taxable year.
(B) For purposes of this subsection (2), the taxable income shall be placed on an annualized basis by (i) multiplying by 12 the taxable income referred to in subsection (2)(A), and (ii) dividing the resulting amount by the number of months in the taxable year (three, five, six, eight, nine, or 11, as the case may be) referred to in subsection (2)(A).
(d) The provisions of this section shall be applicable to all taxable years commencing after December 31, 1992.
L. 1992, ch. 295, § 4; May 28.
K.S.A. 79-1128 Allocation and apportionment of income of financial institutions engaged in multi-state business activities; definitions.
79-1128. Allocation and apportionment of income of financial institutions engaged in multi-state business activities; definitions.
As used in K.S.A. 79-1128 through 79-1132 , unless the context otherwise requires:
(a) "Billing address" means the location indicated in the books and records of the taxpayer on the first day of the taxable year, or on such later date in the taxable year when the customer relationship began, as the address where any notice, statement or bill relating to a customer's account is mailed.
(b) "Borrower or credit card holder located in this state" means:
(1) A borrower, other than a credit card holder, that is engaged in a trade or business which maintains its commercial domicile in this state; or
(2) a borrower that is not engaged in a trade or business or a credit card holder whose billing address is in this state.
(c) "Business income" means all income to the extent that it may be treated as apportionable business income under the constitution of the United States.
(d) "Commercial domicile" means:
(1) The headquarters of the trade or business, that is, the place from which the trade or business is principally managed and directed; or
(2) if a taxpayer is organized under the laws of a foreign country, or of the commonwealth of Puerto Rico, or any territory or possession of the United States, such taxpayer's commercial domicile shall be deemed for the purposes of this act to be the state of the United States or the District of Columbia from which such taxpayer's trade or business in the United States is principally managed and directed. It shall be presumed, subject to rebuttal, that the location from which the taxpayer's trade or business is principally managed and directed is the state of the United States or the District of Columbia to which the greatest number of employees are regularly connected or out of which they are working, irrespective of where the services of such employees are performed, as of the last day of the taxable year.
(e) "Compensation" means wages, salaries, commissions and any other form of remuneration paid to employees for personal services that are included in such employee's gross income under the federal internal revenue code. In the case of employees not subject to the federal internal revenue code, such as those employed in foreign countries, the determination of whether such payments would constitute gross income to such employees under the federal internal revenue code shall be made as though such employees were subject to the federal internal revenue code.
(f) "Credit card" means credit, travel or entertainment card.
(g) "Credit card issuer's reimbursement fee" means the fee a taxpayer receives from a merchant's bank because one of the persons to whom the taxpayer has issued a credit card has charged merchandise or services to the credit card.
(h) "Employee" means, with respect to a particular taxpayer, any individual who, under the usual common-law rules applicable in determining the employer-employee relationship, has the status of an employee of that taxpayer.
(i) "Financial institution" means: a national banking association, federally chartered savings bank, state bank, trust company or savings and loan association.
(j) "Gross rents" means the actual sum of money or other consideration payable for the use or possession of property.
(1) "Gross rents" shall include, but not be limited to:
(A) Any amount payable for the use or possession of real property or tangible property whether designated as a fixed sum of money or as a percentage of receipts, profits or otherwise;
(B) any amount payable as additional rent or in lieu of rent, such as interest, taxes, insurance, repairs or any other amount required to be paid by the terms of a lease or other arrangement; or
(C) a proportionate part of the cost of any improvement to real property made by or on behalf of the taxpayer which reverts to the owner or lessor upon termination of a lease or other arrangement. The amount to be included in gross rents is the amount of amortization or depreciation allowed in computing the taxable income base for the taxable year, except that, where a building is erected on leased land by or on behalf of the taxpayer, the value of the land is determined by multiplying the gross rent by eight and the value of the building is determined in the same manner as if owned by the taxpayer.
(2) The following are not included in the term "gross rents":
(A) Reasonable amounts payable as separate charges for water and electric service furnished by the lessor;
(B) reasonable amounts payable as service charges for janitorial services furnished by the lessor;
(C) reasonable amounts payable for storage, provided such amounts are payable for space not designated and not under the control of the taxpayer; or
(D) that portion of any rental payment which is applicable to the space subleased from the taxpayer and not used by it.
(k) "Loan" means any extension of credit resulting from direct negotiations between the taxpayer and its customer, or the purchase, or both, in whole or in part, of such extension of credit from another. Loans include participations, syndications, and leases treated as loans for federal income tax purposes. Loans shall not include: properties treated as loans under section 595 of the federal internal revenue code; futures or forward contracts; options; notional principal contracts such as swaps; credit card receivables, including purchased credit card relationships; noninterest bearing balances due from depository institutions; cash items in the process of collection; federal funds sold; securities purchased under agreements to resell; assets held in a trading account; securities; interests in a REMIC, or other mortgage-backed or asset-backed security; and other similar items.
(l) "Loan secured by real property" means that 50% or more of the aggregate value of the collateral used to secure a loan or other obligation, when valued at fair market value as of the time the original loan or obligation was incurred, was real property.
(m) "Merchant discount" means the fee or negotiated discount charged to a merchant by the taxpayer for the privilege of participating in a program whereby a credit card is accepted in payment for merchandise or services sold to the card holder.
(n) "Nonbusiness income" means all income which is not business income.
(o) "Participation" means an extension of credit in which an undivided ownership interest is held on a pro rata basis in a single loan or pool of loans and related collateral. In a loan participation, the credit originator initially makes the loan and then subsequently resells all or a portion of it to other lenders. The participation may or may not be known to the borrower.
(p) "Person" means an individual, estate, trust, partnership, corporation and any other business entity.
(q) "Principal base of operations" with respect to transportation property means the place of more or less permanent nature from which such property is regularly directed or controlled. With respect to an employee, the "principal base of operations" means the place of more or less permanent nature from which the employee regularly: (1) Starts such employee's work and to which such employee customarily returns in order to receive instructions from such employee's employer; or (2) communicates with such employee's customers or other persons; or (3) performs any other function necessary to the exercise of such employee's trade or profession at some other point or points.
(r) "Real property owned" and "tangible personal property owned" means real and tangible personal property, respectively: (1) On which the taxpayer may claim depreciation for federal income tax purposes; or (2) property to which the taxpayer holds legal title and on which no other person may claim depreciation for federal income tax purposes or could claim depreciation if subject to federal income tax. Real and tangible personal property do not include coin, currency or property acquired in lieu of or pursuant to a foreclosure.
(s) "Regular place of business" means an office at which the taxpayer carries on its business in a regular and systematic manner and which is continuously maintained, occupied and used by employees of the taxpayer.
(t) "State" means a state of the United States, the District of Columbia, the commonwealth of Puerto Rico, any territory or possession of the United States or any foreign country.
(u) "Syndication" means an extension of credit in which two or more persons fund and each person is at risk only up to a specified percentage of the total extension of credit or up to a specified dollar amount.
(v) "Taxable" means either:
(1) That a taxpayer is subject in another state to a net income tax, a franchise tax measured by net income, a franchise tax for the privilege of doing business, a corporate stock tax, including a bank shares tax, a single business tax, or an earned surplus tax, or any tax which is imposed upon or measured by net income; or
(2) that another state has jurisdiction to subject the taxpayer to any of such taxes regardless of whether, in fact, the state does or does not.
(w) "Transportation property" means vehicles and vessels capable of moving under their own power, such as aircraft, trains, water vessels and motor vehicles, as well as any equipment or containers attached to such property, such as rolling stock, barges, trailers or the like.
L. 1996, ch. 270, § 2; July 1.
K.S.A. 79-1129 Procedures and methodology in determining allocable and apportionable income; computation of certain deductions from income; filing of certain statements with secretary.
79-1129. Procedures and methodology in determining allocable and apportionable income; computation of certain deductions from income; filing of certain statements with secretary.
(a) Except as otherwise specifically provided, a financial institution whose business activity is taxable both within and without this state shall allocate and apportion its net income as provided in this act. All items of nonbusiness income, income which is not includable in the apportionable income tax base, shall be allocated pursuant to the provisions of K.S.A. 79-3274 through 79-3278 and amendments thereto. A financial institution organized under the laws of a foreign country, the commonwealth of Puerto Rico, or a territory or possession of the United States whose effectively connected income, as defined under the federal internal revenue code, is taxable both within this state and within another state, other than the state in which it is organized, shall allocate and apportion its net income as provided in this act and its apportionment factors shall include the part of its property, payroll and receipts that is related to its apportionable income.
(b) (1) For taxable years commencing prior to January 1, 2027, all business income shall be apportioned as follows:
All business income, income which is includable in the apportionable income tax base, shall be apportioned to this state by multiplying such income by the apportionment percentage. The apportionment percentage is determined by adding the taxpayer's receipts factor, as described in K.S.A. 79-1130 , and amendments thereto, property factor, as described in K.S.A. 79-1131 , and amendments thereto, and payroll factor, as described in K.S.A. 79-1132 , and amendments thereto, together and dividing the sum by three. If one of the factors is missing, the two remaining factors are added and the sum is divided by two. If two of the factors are missing, the remaining factor is the apportionment percentage. A factor is missing if both its numerator and denominator are zero, but it is not missing merely because its numerator is zero.
(2) For tax years commencing on or after January 1, 2027, all business income shall be apportioned to this state by multiplying the business income by the receipts factor.
(c) Each factor shall be computed according to the method of accounting, cash or accrual basis, used by the taxpayer for the taxable year.
(d) If the allocation and apportionment provisions of this act do not fairly represent the extent of the taxpayer's business activity in this state, the taxpayer may petition for or the secretary of revenue may require, in respect to all or any part of the taxpayer's business activity, if reasonable:
(1) Separate accounting;
(2) the exclusion of any one or more of the factors;
(3) the inclusion of one or more additional factors which will fairly represent the taxpayer's business activity in this state; or
(4) the employment of any other method to effectuate an equitable allocation and apportionment of the taxpayer's income.
(e) In the event a combined report is utilized to determine the Kansas income attributable to a unitary group of financial institutions, the financial institutions in the combined group shall include only those institutions which have a branch or office in Kansas.
(f) (1) There shall be allowed as a deduction an amount computed in accordance with this subsection.
(2) As of July 1, 2025, only publicly traded companies, including affiliated corporations participating in the filing of a publicly traded company's financial statements prepared in accordance with generally accepted accounting principles, shall be eligible for this deduction.
(3) If the provisions of this section result in an aggregate increase in the taxpayer's net deferred tax liability or an aggregate decrease in the taxpayer's net deferred tax asset, or an aggregate change from a net deferred tax asset to a net deferred tax liability, the taxpayer shall be entitled to a deduction, as determined in this subsection. For the purposes of this section, the term "taxpayer" includes a unitary group of businesses that is required to file a combined report. The deferred tax impact deduction provided under this section for a unitary group of businesses that is required to file a combined report shall be calculated using unitary net deferred tax assets and liabilities and deducted against unitary group income.
(4) A taxpayer shall be entitled to a deferred tax impact deduction from the taxpayer's net business income before apportionment equal to the amount necessary to offset the increase in the net deferred tax liability or decrease in the net deferred tax asset, or aggregate change from a net deferred tax asset to a net deferred tax liability. Such increase in the net deferred tax liability, decrease in the net deferred tax asset or the aggregate change from a net deferred tax asset to a net deferred tax liability shall be computed based on the change that would result from the imposition of the single sales factor requirements pursuant to this section, excluding the deduction provided under this paragraph, as of the end of the tax year prior to tax year 2025. The amount of the deduction shall equal the annual deferred tax deduction amount set forth in paragraph (5).
(5) The annual deferred tax deduction amount shall be calculated as follows:
(A) The deferred tax impact determined in paragraph (4) shall be divided by the privilege tax rate in effect for the tax year pursuant to K.S.A. 79-1107 and 79-1108 , and amendments thereto;
(B) the resulting amount shall be further divided by the Kansas apportionment factor that was used by the taxpayer in the calculation of the deferred tax assets and deferred tax liabilities as provided in this subsection; and
(C) the result multiplied by 1 / 10 shall represent the total net deferred tax deduction available for the first tax year beginning on or after January 1, 2035, and the next nine successive tax years.
(6) The deduction calculated under paragraph (5) shall not be adjusted as a result of any events subsequent to such calculation, including, but not limited to, any disposition or abandonment of assets. Such deduction shall be calculated without regard to any tax liabilities under the federal internal revenue code and shall not alter the tax basis of any asset. If the deduction under this section is greater than the taxpayer's net business income before apportionment, any excess deduction shall be carried forward and applied as a deduction for future tax years until fully utilized.
(7) At the discretion of the taxpayer, the taxpayer shall be allowed to claim other available tax credits before claiming the deferred tax deduction calculated under this section. Any deferred tax deduction calculated under this section not claimed on a return shall be carried forward and applied as a deduction for future tax years until fully utilized.
(8) Any taxpayer intending to claim a deduction under this subsection shall file a statement with the secretary on or before July 1, 2027, specifying the total amount of the deduction that the taxpayer claims. The statement shall be made on such form and in such manner as prescribed by the secretary and shall contain such information or calculations as the secretary may specify. No deduction shall be allowed under this section for any taxable year except to the extent claimed in the manner prescribed on or before July 1, 2027.
(9) For purposes of this subsection:
(A) "Net deferred tax liability" means deferred tax liabilities that exceed the deferred tax assets of the taxpayer, as computed in accordance with generally accepted accounting principles.
(B) "Net deferred tax asset" means that deferred tax assets exceed the deferred tax liabilities of the taxpayer, as computed in accordance with generally accepted accounting principles.
L. 1996, ch. 270, § 1; L. 2025, ch. 123, § 4; July 1.
K.S.A. 79-1130 Same; receipts factor defined and described.
79-1130. Same; receipts factor defined and described.
(a) General. The receipts factor is a fraction, the numerator of which is the receipts of the taxpayer in this state during the taxable year and the denominator of which is the receipts of the taxpayer within and without this state during the taxable year. The method of calculating receipts for purposes of the denominator is the same as the method used in determining receipts for purposes of the numerator. The receipts factor shall include only those receipts described herein which constitute business income and are included in the computation of the apportionable income base for the taxable year.
(b) Receipts from the lease of real property. The numerator of the receipts factor includes receipts from the lease or rental of real property owned by the taxpayer if the property is located within this state or receipts from the sublease of real property if the property is located within this state.
(c) Receipts from the lease of tangible personal property.
(1) Except as described in paragraph (2) of this subsection, the numerator of the receipts factor includes receipts from the lease or rental of tangible personal property owned by the taxpayer if the property is located within this state when it is first placed in service by the lessee.
(2) Receipts from the lease or rental of transportation property owned by the taxpayer are included in the numerator of the receipts factor to the extent that the property is used in this state. The extent an aircraft will be deemed to be used in this state and the amount of receipts that is to be included in the numerator of this state's receipts factor is determined by multiplying all the receipts from the lease or rental of the aircraft by a fraction, the numerator of which is the number of landings of the aircraft in this state and the denominator of which is the total number of landings of the aircraft. If the extent of the use of any transportation property within this state cannot be determined, then the property will be deemed to be used wholly in the state in which the property has its principal base of operations. A motor vehicle will be deemed to be used wholly in the state in which it is registered.
(d) Interest from loans secured by real property.
(1) The numerator of the receipts factor includes interest and fees or penalties in the nature of interest from loans secured by real property if the property is located within this state. If the property is located both within this state and one or more other states, the receipts described in this subsection are included in the numerator of the receipts factor if more than 50% of the fair market value of the real property is located within this state. If more than 50% of the fair market value of the real property is not located within any one state, then the receipts described in this subsection shall be included in the numerator of the receipts factor if the borrower is located in this state.
(2) The determination of whether the real property securing a loan is located within this state shall be made as of the time the original agreement was made and any and all subsequent substitutions of collateral shall be disregarded.
(e) Interest from loans not secured by real property. The numerator of the receipts factor includes interest and fees or penalties in the nature of interest from loans not secured by real property if the borrower is located in this state.
(f) Net gains from the sale of loans. The numerator of the receipts factor includes net gains from the sale of loans. Net gains from the sale of loans includes income recorded under the coupon stripping rules of section 1286 of the internal revenue code.
(1) The amount of net gains, but not less than zero, from the sale of loans secured by real property included in the numerator is determined by multiplying such net gains by a fraction the numerator of which is the amount included in the numerator of the receipts factor pursuant to subsection (d) and the denominator of which is the total amount of interest and fees or penalties in the nature of interest from loans secured by real property.
(2) The amount of net gains, but not less than zero, from the sale of loans not secured by real property included in the numerator is determined by multiplying such net gains by a fraction the numerator of which is the amount included in the numerator of the receipts factor pursuant to subsection (e) and the denominator of which is the total amount of interest and fees or penalties in the nature of interest from loans not secured by real property.
(g) Receipts from credit card receivables. The numerator of the receipts factor includes interest and fees or penalties in the nature of interest from credit card receivables and receipts from fees charged to card holders, such as annual fees, if the billing address of the card holder is in this state.
(h) Net gains from the sale of credit card receivables. The numerator of the receipts factor includes net gains, but not less than zero, from the sale of credit card receivables multiplied by a fraction, the numerator of which is the amount included in the numerator of the receipts factor pursuant to subsection (g) and the denominator of which is the taxpayer's total amount of interest and fees or penalties in the nature of interest from credit card receivables and fees charged to card holders.
(i) Credit card issuer's reimbursement fees. The numerator of the receipts factor includes all credit card issuer's reimbursement fees multiplied by a fraction, the numerator of which is the amount included in the numerator of the receipts factor pursuant to subsection (g) and the denominator of which is the taxpayer's total amount of interest and fees or penalties in the nature of interest from credit card receivables and fees charged to card holders.
(j) Receipts from merchant discount. The numerator of the receipts factor includes receipts from merchant discount if the commercial domicile of the merchant is in this state. Such receipts shall be computed net of any cardholder charge backs, but shall not be reduced by any interchange transaction fees or by any issuer's reimbursement fees paid to another for charges made by its card holders.
(k) Loan servicing fees.
(1) (A) The numerator of the receipts factor includes loan servicing fees derived from loans secured by real property multiplied by a fraction the numerator of which is the amount included in the numerator of the receipts factor pursuant to subsection (d) and the denominator of which is the total amount of interest and fees or penalties in the nature of interest from loans secured by real property.
(B) The numerator of the receipts factor includes loan servicing fees derived from loans not secured by real property multiplied by a fraction the numerator of which is the amount included in the numerator of the receipts factor pursuant to subsection (e) and the denominator of which is the total amount of interest and fees or penalties in the nature of interest from loans not secured by real property.
(2) In circumstances in which the taxpayer receives loan servicing fees for servicing either the secured or the unsecured loans of another, the numerator of the receipts factor shall include such fees if the borrower is located in this state.
(l) Receipts from services. The numerator of the receipts factor includes receipts from services not otherwise apportioned under this section if the service is performed in this state. If the service is performed both within and without this state, the numerator of the receipts factor includes receipts from services not otherwise apportioned under this section, if a greater proportion of the income-producing activity is performed in this state based on cost of performance.
(m) Receipts from investment assets and activities and trading assets and activities.
(1) Interest, dividends, net gains, but not less than zero, and other income from investment assets and activities and from trading assets and activities shall be included in the receipts factor. Investment assets and activities and trading assets and activities include but are not limited to: Investment securities; trading account assets; federal funds; securities purchased and sold under agreements to resell or repurchase; options; futures contracts; forward contracts; notional principal contracts such as swaps; equities; and foreign currency transactions. With respect to the investment and trading assets and activities described in subparagraphs (A) and (B) of this paragraph, the receipts factor shall include the amounts described in such subparagraphs.
(A) The receipts factor shall include the amount by which interest from federal funds sold and securities purchased under resale agreements exceeds interest expense on federal funds purchased and securities sold under repurchase agreements.
(B) The receipts factor shall include the amount by which interest, dividends, gains and other income from trading assets and activities, including but not limited to assets and activities in the matched book, in the arbitrage book, and foreign currency transactions, exceed amounts paid in lieu of interest, amounts paid in lieu of dividends, and losses from such assets and activities.
(2) The numerator of the receipts factor includes interest, dividends, net gains, but not less than zero, and other income from investment assets and activities and from trading assets and activities described in paragraph (1) of this subsection that are attributable to this state.
(A) The amount of interest, dividends, net gains, but not less than zero, and other income from investment assets and activities in the investment account to be attributed to this state and included in the numerator is determined by multiplying all such income from such assets and activities by a fraction, the numerator of which is the average value of such assets which are properly assigned to a regular place of business of the taxpayer within this state and the denominator of which is the average value of all such assets.
(B) The amount of interest from federal funds sold and purchased and from securities purchased under resale agreements and securities sold under repurchase agreements attributable to this state and included in the numerator is determined by multiplying the amount described in subparagraph (A) of paragraph (1) of this subsection from such funds and such securities by a fraction, the numerator of which is the average value of federal funds sold and securities purchased under agreements to resell which are properly assigned to a regular place of business of the taxpayer within this state and the denominator of which is the average value of all such funds and such securities.
(C) The amount of interest, dividends, gains and other income from trading assets and activities, including but not limited to assets and activities in the matched book, in the arbitrage book and foreign currency transactions, but excluding amounts described in subparagraphs (A) or (B) of this paragraph, attributable to this state and included in the numerator is determined by multiplying the amount described in subparagraph (B) of paragraph (1) of this subsection by a fraction, the numerator of which is the average value of such training assets which are properly assigned to a regular place of business of the taxpayer within this state and the denominator of which is the average value of all such assets.
(D) For purposes of this paragraph, average value shall be determined using the rules for determining the average value of tangible personal property set forth in subsections (c) and (d) of K.S.A. 79-1131 .
(3) In lieu of using the method set forth in paragraph (2) of this subsection, the secretary of revenue may permit or require in order to fairly represent the business activity of the taxpayer in this state, the use of the method set forth in this paragraph.
(A) The amount of interest, dividends, net gain, but not less than zero, and other income from investment assets and activities in the investment account to be attributed to this state and included in the numerator is determined by multiplying all such income from such assets and activities by a fraction, the numerator of which is the gross income from such assets and activities which are properly assigned to a regular place of business of the taxpayer within this state and the denominator of which is the gross income from all such assets and activities.
(B) The amount of interest from federal funds sold and purchased and from securities purchased under resale agreements and securities sold under repurchase agreements attributable to this state and included in the numerator is determined by multiplying the amount described in subparagraph (A) of paragraph (1) of this subsection from such funds and such securities by a fraction, the numerator of which is the gross income from such funds and such securities which are properly assigned to a regular place of business of the taxpayer within this state and the denominator of which is the gross income from all such funds and such securities.
(C) The amount of interest, dividends, gains and other income from trading assets and activities, including but not limited to assets and activities in the matched book, in the arbitrage book and foreign currency transactions, but excluding amounts described in subparagraphs (A) or (B) of this paragraph, attributable to this state and included in the numerator is determined by multiplying the amount described in subparagraph (B) of paragraph (1) of this subsection by a fraction, the numerator of which is the gross income from such trading assets and activities which are properly assigned to a regular place of business of the taxpayer within this state and the denominator of which is the gross income from all such assets and activities.
(4) If the taxpayer elects or is required by the secretary of revenue to use the method set forth in paragraph (3) of this subsection, it shall use this method on all subsequent returns unless the taxpayer receives prior permission from the secretary of revenue to use, or the secretary of revenue requires a different method.
(5) The taxpayer shall have the burden of proving that an investment asset or activity or trading asset or activity was properly assigned to a regular place of business outside of this state by demonstrating that the day-to-day decisions regarding the asset or activity occurred at a regular place of business outside this state. Where the day-to-day decisions regarding an investment asset or activity or trading asset or activity occur at more than one regular place of business and one such regular place of business is in this state and one such regular place of business is outside this state, such asset or activity shall be considered to be located at the regular place of business of the taxpayer where the investment or trading policies or guidelines with respect to the asset or activity are established. Unless the taxpayer demonstrates to the contrary, such policies and guidelines shall be presumed to be established at the commercial domicile of the taxpayer.
(n) Other receipts. To the extent not inconsistent with this act, the numerator of the receipts factor includes other receipts pursuant to the rules set forth in K.S.A. 79-3286 , 79-3287 , and 79-3288 , and amendments thereto.
(o) Attribution of certain receipts to commercial domicile. All receipts which would be assigned under this section to a state in which the taxpayer is not taxable shall be included in the numerator of the receipts factor, if the taxpayer's commercial domicile is in this state.
L. 1996, ch. 270, § 3; July 1.
K.S.A. 79-1131 Same; property factor defined and described.
79-1131. Same; property factor defined and described.
(a) General. The property factor is a fraction, the numerator of which is the average value of real property and tangible personal property rented to the taxpayer that is located or used within this state during the taxable year, the average value of the taxpayer's real and tangible personal property owned that is located or used within this state during the taxable year, and the average value of the taxpayer's loans and credit card receivables that are located within this state during the taxable year, and the denominator of which is the average value of all such property located or used within and without this state during the taxable year.
(b) Property included. The property factor shall include only property the income or expenses of which are included or would have been included if not fully depreciated or expensed, or depreciated or expensed to a nominal amount in the computation of the apportionable income base for the taxable year.
(c) Value of property owned by the taxpayer.
(1) The value of real property and tangible personal property owned by the taxpayer is the original cost or other basis of such property for federal income tax purposes without regard to depletion, depreciation or amortization.
(2) Loans are valued at their outstanding principal balance, without regard to any reserve for bad debts. If a loan is charged off in whole or in part for federal income tax purposes, the portion of the loan charged off is not outstanding. A specifically allocated reserve established pursuant to regulatory or financial accounting guidelines which is treated as charged off for federal income tax purposes shall be treated as charged off for purposes of this section.
(3) Credit card receivables are valued at their outstanding principal balance, without regard to any reserve for bad debts. If a credit card receivable is charged off in whole or in part for federal income tax purposes, the portion of the receivable charged off is not outstanding.
(d) Average value of property owned by the taxpayer. The average value of property owned by the taxpayer is computed on an annual basis by adding the value of the property on the first day of the taxable year and the value on the last day of the taxable year and dividing the sum by two. If averaging on this basis does not properly reflect average value, the secretary of revenue may require averaging on a more frequent basis. The taxpayer may elect to average on a more frequent basis. When averaging on a more frequent basis is required by the secretary of revenue or is elected by the taxpayer, the same method of valuation must be used consistently by the taxpayer with respect to property within and without this state and on all subsequent returns unless the taxpayer receives prior permission from the secretary of revenue or the secretary of revenue requires a different method of determining average value.
(e) Average value of real property and tangible personal property rented to the taxpayer.
(1) The average value of real property and tangible personal property that the taxpayer has rented from another and which is not treated as property owned by the taxpayer for federal income tax purposes, shall be determined annually by multiplying the gross rents payable during the taxable year by eight.
(2) Where the use of the general method described in this subsection results in inaccurate valuations of rented property, any other method which properly reflects the value may be adopted by the secretary of revenue or by the taxpayer when approved in writing by the secretary of revenue. Once approved, such other method of valuation must be used on all subsequent returns unless the taxpayer receives prior approval from the secretary of revenue or the secretary of revenue requires a different method of valuation.
(f) Location of real property and tangible personal property owned by or rented to the taxpayer.
(1) Except as described in paragraph (2) of this subsection, real property and tangible personal property owned by or rented to the taxpayer is considered to be located within this state if it is physically located, situated or used within this state.
(2) Transportation property is included in the numerator of the property factor to the extent that the property is used in this state. The extent an aircraft will be deemed to be used in this state and the amount of value that is to be included in the numerator of this state's property factor is determined by multiplying the average value of the aircraft by a fraction, the numerator of which is the number of landings of the aircraft in this state and the denominator of which is the total number of landings of the aircraft everywhere. If the extent of the use of any transportation property within this state cannot be determined, then the property will be deemed to be used wholly in the state in which the property has its principal base of operations. A motor vehicle will be deemed to be used wholly in the state in which it is registered.
(g) Location of loans.
(1) (A) A loan is considered to be located within this state if it is properly assigned to a regular place of business of the taxpayer within this state.
(B) A loan is properly assigned to the regular place of business with which it has a preponderance of substantive contacts. A loan assigned by the taxpayer to a regular place of business without the state shall be presumed to have been properly assigned if:
(i) The taxpayer has assigned, in the regular course of its business, such loan on its records to a regular place of business consistent with federal or state regulatory requirements;
(ii) such assignment on its records is based upon substantive contacts of the loan to such regular place of business; and
(iii) the taxpayer uses such records reflecting assignment of loans for the filing of all state and local tax returns for which an assignment of loans to a regular place of business is required.
(C) The presumption of proper assignment of a loan provided in subparagraph (B) of paragraph (1) of this subsection may be rebutted upon a showing by the secretary of revenue, supported by a preponderance of the evidence, that the preponderance of substantive contacts regarding such loan did not occur at the regular place of business to which it was assigned on the taxpayer's records. When such presumption has been rebutted, the loan shall then be located within this state if:
(i) The taxpayer had a regular place of business within this state at the time the loan was made; and
(ii) the taxpayer fails to show, by a preponderance of the evidence, that the preponderance of substantive contacts regarding such loan did not occur within this state.
(2) In the case of a loan which is assigned by the taxpayer to a place without this state which is not a regular place of business, it shall be presumed, subject to rebuttal by the taxpayer on a showing supported by the preponderance of evidence, that the preponderance of substantive contacts regarding the loan occurred within this state if, at the time the loan was made the taxpayer's commercial domicile was within this state.
(3) To determine the state in which the preponderance of substantive contacts relating to a loan have occurred, the facts and circumstances regarding the loan at issue shall be reviewed on a case-by-case basis and consideration shall be given to such activities as the solicitation, investigation, negotiation, approval and administration of the loan.
As used in this paragraph:
(A) "Solicitation" may be either active or passive. Active solicitation occurs when an employee of the taxpayer initiates the contact with the customer. Such activity is located at the regular place of business which the taxpayer's employee is regularly connected with or working out of, regardless of where the services of such employee were actually performed. Passive solicitation occurs when the customer initiates the contact with the taxpayer. If the customer's initial contact was not at a regular place of business of the taxpayer, the regular place of business, if any, where the passive solicitation occurred is determined by the facts in each case.
(B) "Investigation" means the procedure whereby employees of the taxpayer determine the credit worthiness of the customer as well as the degree of risk involved in making a particular agreement. Such activity is located at the regular place of business which the taxpayer's employees are regularly connected with or working out of, regardless of where the services of such employees were actually performed.
(C) "Negotiation" means the procedure whereby employees of the taxpayer and its customer determine the terms of the agreement such as the amount, duration, interest rate, frequency of repayment, currency denomination and security required. Such activity is located at the regular place of business which the taxpayer's employees are regularly connected with or working out of, regardless of where the services of such employees were actually performed.
(D) "Approval" means the procedure whereby employees or the board of directors of the taxpayer make the final determination whether to enter into the agreement. Such activity is located at the regular place of business which the taxpayer's employees are regularly connected with or working out of, regardless of where the services of such employees were actually performed. If the board of directors makes the final determination, such activity is located at the commercial domicile of the taxpayer.
(E) "Administration" means the process of managing the account. This process includes bookkeeping, collecting the payments, corresponding with the customer, reporting to management regarding the status of the agreement and proceeding against the borrower or the security interest if the borrower is in default. Such activity is located at the regular place of business which oversees this activity.
(h) Location of credit card receivables. For purposes of determining the location of credit card receivables, credit card receivables shall be treated as loans and shall be subject to the provisions of subsection (g) of this section.
(i) Period for which properly assigned loan remains assigned. A loan that has been properly assigned to a state shall, absent any change of material fact, remain assigned to such state for the length of the original term of the loan. Thereafter, such loan may be properly assigned to another state if such loan has a preponderance of substantive contact to a regular place of business there.
L. 1996, ch. 270, § 4; July 1.
K.S.A. 79-1132 Same; payroll factor defined and described.
79-1132. Same; payroll factor defined and described.
(a) General. The payroll factor is a fraction, the numerator of which is the total amount paid in this state during the taxable year by the taxpayer for compensation and the denominator of which is the total compensation paid for both within and without this state during the taxable year. The payroll factor shall include only that compensation which is included in the computation of the apportionable income tax base for the taxable year.
(b) Compensation relating to nonbusiness income and independent contractors. The compensation of any employee for services or activities which are connected with the production of nonbusiness income, income which is not includable in the apportionable income base, and payments made to any independent contractor or any other person not properly classifiable as an employee shall be excluded from both the numerator and denominator of the factor.
(c) When compensation paid in this state. Compensation is paid in this state if any one of the following tests, applied consecutively, is met:
(1) The employee's services are performed entirely within this state;
(2) the employee's services are performed both within and without the state, but the service performed without the state is incidental to the employee's service within the state. The term "incidental" means any service which is temporary or transitory in nature, or which is rendered in connection with an isolated transaction;
(3) if the employee's services are performed both within and without this state, the employee's compensation will be attributed to this state:
(A) If the employee's principal base of operations is within this state; or
(B) if there is no principal base of operations in any state in which some part of the services are performed, but the place from which the services are directed or controlled is in this state; or
(C) if the principal base of operations and the place from which the services are directed or controlled are not in any state in which some part of the service is performed but the employee's residence is in this state.
L. 1996, ch. 270, § 5; July 1.
K.S.A. 79-1133 Tax upon cessation of business as financial institution; computation.
79-1133. Tax upon cessation of business as financial institution; computation.
For taxpayers described in K.S.A. 79-1106 , and amendments thereto, a tax is hereby imposed for the privilege of engaging in transactions or activity incidental or related to the cessation of doing business in this state, including cessation due to merger, consolidation, other combination, dissolution, liquidation or any other event. Such tax shall be measured by the net income for the tax year in which the taxpayer ceases to do business and shall be computed using the same applicable rates provided by K.S.A. 79-1107 or 79-1108 , and amendments thereto. Such tax shall be due and owing within six months of the date on which the taxpayer ceases to do business. This section shall apply to all such privileges occurring on or after July 1, 1996.
L. 1996, ch. 270, § 6; July 1.
K.S.A. 79-1134 Supplemental to K.S.A. 79-1106 et seq.
79-1134. Supplemental to K.S.A. 79-1106 et seq.
K.S.A. 79-1128 through 79-1133 shall be and constitute a part of and shall be supplemental to the privilege tax statutes enacted at K.S.A. 79-1106 et seq., and amendments thereto.
L. 1996, ch. 270, § 8; July 1.
K.S.A. 79-1135 Consolidated returns or combined reports required, when.
79-1135. Consolidated returns or combined reports required, when.
(a) Any taxpayer described in K.S.A. 79-1106 , and amendments thereto, which owns, capitalizes or utilizes an affiliate with one of the affiliate's purposes being to make, hold or manage for, or on behalf of, the taxpayer, investments in securities which the taxpayer would be permitted to make for its own account may be required to file consolidated returns or combined reports for purposes of determining the tax liability under article 11 of chapter 79 of the Kansas Statutes Annotated as if such taxpayer and affiliate were one entity.
(b) (1) Any taxpayer required to file a consolidated return or combined report under K.S.A. 79-1135, and amendments thereto, and required to determine an apportionment percentage under K.S.A. 79-1129 , and amendments thereto, shall not include in either the numerator or the denominator of the receipts factor described in K.S.A. 79-1130 , and amendments thereto, amounts received from or provided to an affiliate described in subsection (a) as consideration from investment assets and activities and trading assets and activities that represent inter-company transactions between the taxpayer and such affiliate; and
(2) receipts as described in subsection (m) of K.S.A. 79-1130 , and amendments thereto, received by an affiliate described in subsection (a) shall be treated by a taxpayer required to file a consolidated return or combined report under K.S.A. 79-1135, and amendments thereto, as receipts of the taxpayer.
(c) For taxpayers described in K.S.A. 79-1106 , and amendments thereto, the secretary of revenue may require returns on a consolidated basis or combined reporting and may distribute or allocate gross income, deductions, credits, or allowances between two or more organizations, trades or businesses, whether or not incorporated, or organized in the United States or Kansas or affiliated, owned or controlled directly or indirectly by the same interests, if the secretary of revenue determines such allocation is necessary to prevent evasion of taxes or to clearly reflect income of the organizations, trades or businesses.
(d) This section shall be and constitute a part of and shall be supplemental to the privilege tax statutes enacted at K.S.A. 79-1106 et seq., and amendments thereto.
L. 1998, ch. 194, § 1; July 1.
K.S.A. 79-1136 Application of act.
79-1136. Application of act.
The provisions of this act shall apply to all taxable years commencing after December 31, 1997.
L. 1998, ch. 194, § 4; July 1.
Source: Kansas Office of Revisor of Statutes (ksrevisor.gov)URL: https://www.ksrevisor.gov/statutes/ksa_ch79.htmlFetched: 10/20/2026