January 13, 2015


State & Local Taxes in 2015


Kansas Tax Code Features

Progressive Features

• Graduated personal income tax structure

• Provides a 17 percent refundable Earned Income Tax Credit (EITC)

• Requires the use of combined reporting for the corporate income tax

Regressive Features

• All business income is exempted through the personal income tax

• State and local sales tax bases include groceries

• Fails to provide a refundable credit to offset sales tax on groceries

• Fails to provide a property tax “circuit breaker” credit for low-income non-elderly renters and homeowners without dependent children

• Fails to provide refundable child tax credits

Tax Changes Enacted in 2013 & 2014

• Income tax rates were further reduced to 2.3 and 3.9%

• Food sales tax credit restored and made nonrefundable

• Percentage of itemized deductions are limited for upper-income taxpayers; charitable contribrutions are not subject to limit

• 2013 tax package allows for the potential elimination of the income tax entirely if revenues targets are reached

• Sales tax rate increased from 5.7 to 6.15

ITEP Tax Inequality Index

According to ITEP’s Tax Inequality Index, Kansas has the 9th most unfair state and local tax system in the country. States with regressive tax struc­tures have negative tax inequality indexes, meaning that incomes are less equal in those states after state and local taxes than before (See Appendix B for state-by-state rankings and more details).

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