Session of 1998
                   
HOUSE BILL No. 2785
         
By Representatives Larkin, Alldritt, Correll, Crow, Dillon, Feuerborn,
                Findley, Flaharty, Grant, Kirk, Krehbiel, McKinney, E. Peterson,
                Phelps, Ruff, Sawyer, Shriver, Spangler, Wells and Wempe
               
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          11             AN ACT relating to inheritance taxation; increasing certain distributee
12             deduction amounts; amending K.S.A. 79-1537 and 79-1542 and re-
13             pealing the existing sections.
14            
15       Be it enacted by the Legislature of the State of Kansas:
16           Section 1. K.S.A. 79-1537 is hereby amended to read as follows:
17       79-1537. (a) A tax is hereby imposed on the privilege of succeeding to
18       the ownership of any property, corporeal or incorporeal, and any interest
19       therein within the jurisdiction of this state.
20           (b) Distributees of estates shall be classified as follows:
21           (1) Class A shall consist of the lineal ancestors, lineal descendants,
22       step-parents, step-children, adopted children, lineal descendants of any
23       adopted child or step-child, the spouse or surviving spouse of a son or
24       daughter, or the spouse or surviving spouse of an adopted child or step-
25       child of the decedent. In the case of an adopted child or step-child, a
26       spouse or surviving spouse of an adopted child or step-child or the lineal
27       descendant of an adopted child or step-child of the decedent, such person
28       shall file with the department of revenue an affidavit setting forth the
29       relationship of such person to the decedent. Such affidavit shall be suf-
30       ficient proof of the adoptive or step-child relationship in question, and
31       the department, or any officer or employee thereof, shall not require any
32       additional proof of such relationship. As used in this paragraph, ``step-
33       child'' means a child of a spouse or former spouse of the decedent.
34           (2) Class B shall consist of the brothers and sisters of the decedent.
35           (3) Class C shall consist of relatives of all degrees of consanguinity,
36       except those included in classes A and B, and shall also include strangers
37       in the blood of the decedent.
38           Notwithstanding the foregoing provisions of this subsection, with re-
39       spect to qualified terminable interest property includable in the dece-
40       dent's estate under K.S.A. 79-1557a, and amendments thereto, the rela-
41       tionship of the distributees of such property shall be determined by their
42       relationship to the individual whose estate made an election with respect
43       to such property pursuant to subsection (b)(3) of K.S.A. 79-1537b, and

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  1       amendments thereto.
  2           (c) (1) From the value of the shares of the distributable estate, as
  3       ascertained under the provisions of this act and succeeded to by the sev-
  4       eral distributees, deductions shall be allowed as follows: (A) To each
  5       member of class A, $30,000 $1,000,000; and (B) to each member of class
  6       B, $5,000 $100,000.
  7           (2) The tax herein provided for shall be charged upon the value of
  8       the shares of the distributable estate after deduction of the amounts
  9       herein provided, except that when one or more of the shares of the dis-
10       tributable estate shall consist of property within and property without the
11       state, only such percentage of the deductions above named shall be al-
12       lowed in the percentage that the Kansas share bears to the total shares
13       of the distributee.
14           (d) The tax herein imposed shall be an amount equal to a percentage
15       of the value of the shares of the distributable estate of the decedent
16       succeeded to by the distributees thereof, reduced by any deductions au-
17       thorized pursuant to subsection (c):
18           (1) Upon the value of shares succeeded to by members of class A
19       reduced by such deductions, the following rates of tax are hereby im-
20       posed: On the first $25,000, or fraction thereof, 1%; on the second
21       $25,000, or fraction thereof, 2%; on the next $50,000, or fraction thereof,
22       3%; on the next $400,000, or fraction thereof, 4%; on all over $500,000,
23       5%;
24           (2) upon the value of shares succeeded to by members of class B
25       reduced by such deductions, the following rates of tax are hereby im-
26       posed: On the first $25,000, or fraction thereof, 3%; on the second
27       $25,000, or fraction thereof, 5%; on the next $50,000, or fraction thereof,
28       71/2%; on the next $400,000, or fraction thereof, 10%; on all over
29       $500,000, 121/2%; and
30           (3) upon the value of shares succeeded to by members of class C, the
31       following rates of taxes are hereby imposed: On any amount up to
32       $100,000, 10%; on any amount in excess of $100,000 and up to $200,000,
33       12%; on all sums in excess of $200,000, 15%.
34           Sec. 2. K.S.A. 79-1542 is hereby amended to read as follows: 79-
35       1542. As used in this act unless the context otherwise requires:
36           (a) Any term used in this act shall have the same meaning as when
37       used in a comparable context in the internal revenue code. Any reference
38       in this act to the ``internal revenue code'' shall mean the provisions of the
39       United States internal revenue code of 1986, as such code exists on De-
40       cember 31, 1992 1997. Any reference in this act to a specific provision of
41       the internal revenue code shall be to such provision as it exists on De-
42       cember 31, 1992 1997.
43           (b) ``Deemed executor'' includes any person in actual or constructive

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  1       possession of any property of the decedent.
  2           (c) ``Director'' means the director of taxation.
  3           (d) ``Distributee'' means a beneficiary, legatee, devisee, heir, next of
  4       kin, grantee, donee, vendee, joint tenant or any other successor in inter-
  5       est, whether outright or in trust.
  6           (e) ``Distributive share'' or ``distributive shares'' means the share or
  7       shares of the distributive estate passing to a distributee or distributees.
  8           (f) ``Domicile'' refers to that place where a person resides, has an
  9       intention to remain and to which they intend to return following any
10       absence.
11           (g) ``Estate'' and ``property'' shall mean the real, personal and mixed
12       property or interest therein of the testator, intestate, grantor, bargainor,
13       vendor or donor which shall pass or be transferred to legatees, devisees,
14       heirs, next of kin, grantees, donees, vendees, or successors and shall in-
15       clude all personal property within or without the state.
16           (h) ``Executor'' and ``administrator'' mean the duly appointed, quali-
17       fied and acting executor or administrator of the decedent in this state.
18           (i) ``Nonresident decedent'' means a decedent who was not a resident
19       decedent at the time of death.
20           (j) ``Personal representative'' means the executor, administrator or
21       deemed executor of the decedent.
22           (k) ``Resident decedent'' means a decedent who was domiciled in this
23       state at the time of death.
24           (l) ``Secretary'' means the secretary of revenue, or the secretary's des-
25       ignee.
26           (m) ``Tax'' includes tax, penalty and interest, unless the context of a
27       particular section otherwise requires.
28           (n) ``Transfer'' shall include the passing of property or any interest
29       therein in possession or enjoyment, present or future, by inheritance,
30       descent, devise, succession, bequest, grant, deed, bargain, sale, gift or
31       appointment in the manner herein prescribed.
32           Sec. 3. K.S.A. 79-1537 and 79-1542 are hereby repealed.
33           Sec. 4. This act shall take effect and be in force from and after its
34       publication in the statute book.
35      
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