Brief ⁽¹⁾

HB 2065, as amended, concerns premium taxes paid by insurance companies. For tax year 2001 and thereafter, the bill allows companies to claim a credit against any premium tax owed in an amount up to 15 percent of the salaries paid to Kansas employees. However, the credit allowed may not reduce the amount of the tax owed by more than 1.125 percent of premium for an insurance company or 1 percent for companies having affiliates.

(Current law allows for a credit up to 30 percent of the salaries paid to Kansas employees with a reduction in the amount of the tax not to exceed 1.25 percent for all companies and affiliates.)

Background

HB 2065 originally concerned exempting from sales tax grain storage facility construction materials and services. The provisions of the bill were deleted and the premium tax credit changes were amended into the bill.

The impact of the premium tax credit formula change will be to generate approximately $9.15 million for the State General Fund.

1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/fulltext.cgi