Bill > SB488

This bill, the Kansas Property Tax Freedom Act of 2026, proposes a phased elimination of property taxes, contingent on voter approval of a constitutional amendment. Starting in tax year 2026, property tax levies will be reduced by 50%, then by 75% in 2027, and completely eliminated for real and personal property in 2028 and beyond. To compensate for lost revenue, taxing subdivisions (like counties, cities, and school districts) will receive revenue replacement grants from a newly established "property tax freedom reserve fund," which will be funded in part by a new "Kansas fair share purchase surcharge." This surcharge, effective January 1, 2027, will be applied to retail purchases, with a flat $1.60 fee for purchases of $20 or more and a 7.6% rate for purchases under $20, though certain items like grocery food, prescription drugs, and motor fuel are exempt. Revenue from this surcharge will be distributed to school districts (48%), other taxing subdivisions (35%), the state general fund (12%), and the property tax freedom reserve fund (5%). Additionally, if the property tax freedom reserve fund exceeds $500 million, excess funds will be rebated to qualified Kansas resident individual taxpayers as a "freedom dividend." The bill also protects existing payment in lieu of taxes (PILOT) agreements for renewable energy facilities and allows municipalities to issue general obligation bonds for capital improvements after 2027, but these must be repaid through voter-approved local add-on surcharges to the fair share purchase surcharge or other dedicated local revenues, not state surcharge funds.

Budget and Finance

Federal and State Affairs (Senate)

https://kslegislature.gov/li/b2025_26/measures/sb488/