[As Amended by House Committee of the Whole]

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          As Amended by House Committee          

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Session of 2000
          HOUSE BILL No. 2588           By Special Committee on Assessment and Taxation           12-16          

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12             AN  ACT relating to income taxation; allowing net operating farm loss
13             carrybacks; amending K.S.A. 79-32,143 and repealing the existing
14             section.
15      
16       Be it enacted by the Legislature of the State of Kansas:
17             Section  1. K.S.A. 79-32,143 is hereby amended to read as follows:
18       79-32,143. (a) For net operating losses incurred in taxable years beginning
19       after December 31, 1987, a net operating loss deduction shall be allowed
20       in the same manner that it is allowed under the federal internal revenue
21       code except that such net operating loss may only be carried forward to
22       each of the 10 taxable years following the taxable year of the net operating
23       loss. For net operating farm losses as defined by subsection (i) of section
24       172 of the federal internal revenue code incurred in taxable years begin-
25       ning after December 31, 1999, a net operating loss deduction shall be
26       allowed in the same manner that it is allowed under the federal internal
27       revenue code except that such net operating loss may be carried forward
28       to each of the 10 taxable years following the taxable year of the net op-
29       erating loss. The amount of the net operating loss that may be carried
30       [back or] forward for Kansas income tax purposes shall be that portion
31       of the federal net operating loss allocated to Kansas under this act in the
32       taxable year that the net operating loss is sustained.
33             (b) The amount of the loss to be carried back or forward will be the
34       federal net operating loss after (1) all modifications required under this
35       act applicable to the net loss in the year the loss was incurred; and (2)
36       after apportionment as to source in the case of corporations, nonresident
37       individuals for losses incurred in taxable years beginning prior to January
38       1, 1978, and nonresident estates and trusts in the same manner that in-
39       come for such corporations, nonresident individuals, estates and trusts is
40       required to be apportioned.
41             (c) If a net operating loss was incurred in a taxable year beginning
42       prior to January 1, 1988, the amount of the net operating loss that may
43       be carried back and carried forward and the period for which it may be

2
  1       carried back and carried forward shall be determined under the provisions
  2       of the Kansas income tax laws which were in effect during the year that
  3       such net operating loss was incurred.
  4             (d) If any portion of a net operating loss described in subsections (a)
  5       and (b) is not utilized prior to the final year of the carryforward period
  6       provided in subsection (a), a refund shall be allowable in such final year
  7       in an amount equal to the refund which would have been allowable in
  8       the taxable year the loss was incurred by utilizing the three year carryback
  9       provided under K.S.A. 79-32,143, as in effect on December 31, 1987,
10       multiplied by a fraction, the numerator of which is the unused portion of
11       such net operating loss in the final year, and the denominator of which
12       is the amount of such net operating loss which could have been carried
13       back to the three years immediately preceding the year in which the loss
14       was incurred. In no event may such fraction exceed 1.
15             (e) Notwithstanding any other provisions of the Kansas income tax
16       act, the net operating loss as computed under subsections (a), (b) and (c)
17       of this section shall be allowed in full in determining Kansas taxable in-
18       come or at the option of the taxpayer allowed in full in determining Kansas
19       adjusted gross income.
20        (f) No refund of income tax which results from a net
21       farm loss carry back shall be allowed in an amount exceeding
22       $1,500 in any year. Any excess amount may be carried back or
23       forward to any other year or years as provided by this section.
24        Sec.  2. K.S.A. 79-32,143 is hereby repealed.
25        Sec.  3. This act shall take effect and be in force from and after its
26       publication in the statute book.