Providing a rebate instead of an income tax credit for the high performance tax credit program and capping the maximum rebate provided.

2025-2026 Regular Session

SB 536 would switch the High Performance Tax Credit to direct rebates and cap total rebates, limiting incentives distribution.

Died in Committee

#economicdevelopment

Summary of SB 536 (2025-2026, Kansas)

Purpose and intent

SB 536 proposes to modify the High Performance Tax Credit program by replacing the existing income tax credit mechanism with a rebate-based approach and capping the maximum rebate available. The bill aims to shift how incentives are delivered to high-performance initiatives, moving from a tax credit structure that reduces tax liability to a direct rebate payment, and placing a limit on the total rebate amount that can be issued.

Key provisions and changes

Rebate mechanism replaces income tax credit: The High Performance Tax Credit program would transition from offering tax credits that reduce a taxpayer’s liability to providing rebates to eligible recipients. This implies that qualified projects or entities would receive a direct payment (rebate) rather than a credit against state income tax.

Capping the maximum rebate: The bill imposes a ceiling on the total rebates that can be paid out under the High Performance program. The specific cap amount (dollar value) and the method for calculating or adjusting the cap are not provided in the summary, but the intent is to limit state fiscal exposure.

Eligibility and administration (implied considerations):

The reform would affect who can claim rebates and under what criteria, aligning with existing or revised high-performance criteria.
Administration would likely shift from tax-credit processing through tax filings to rebate administration, including eligibility verification, claim processing, and funding allocation.

Fiscal and budgetary implications: By converting to rebates and capping payments, the bill targets a predictable maximum expenditure for the program, potentially affecting annual budget planning and the distribution of incentives across projects.

Who would be affected

Qualified entities/projects currently eligible for the High Performance Tax Credit would transition to Rebates, subject to the new cap and administrative rules.

Taxpayers and participants who previously benefited from tax credits may experience changes in timing and form of incentives (rebates vs. tax relief).

State agencies involved in economic development, energy efficiency, or performance-oriented incentives would shift procedures toward rebate processing, monitoring, and compliance.

Procedural and timeline aspects

Introduced: March 16, 2026.

Referred to: Senate Committee on Assessment and Taxation (March 17, 2026).

Status: Died in Committee (April 10, 2026), meaning the bill did not advance to the full Senate for debate or passage in its current session.

Notes on impact and considerations

The transition to a rebate program could affect:

The speed and predictability of incentive delivery.
Administrative workload and costs for the state.
The total fiscal impact given the cap and potential growth of applications.

Details such as the exact rebate calculation, the cap amount, eligibility criteria, and funding sources are not specified in the provided summary. These would be critical to assess the bill’s practical effect on participants and state finances if a future version is introduced.

If you’d like, I can compare SB 536 to the current High Performance Tax Credit framework or map out potential fiscal scenarios under different cap levels.