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HB 2234

Substitute for HB 2234 by Committee on Taxation - Providing a sales tax exemption for purchases made by Junction City main street, inc.

2025-2026 Regular Session

HB 2234 grants a state sales tax exemption to Junction City Main Street, Inc., effective July 1, 2025, causing about $6,500/year revenue loss and a $1,340 one-time admin cost.

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Bill Summary · HB 2234

Summary — HB 2234

Title: Providing a sales tax exemption for purchases by Junction City Main Street, Inc.
Introduced: January 29, 2025
Status: Referred to Committee on Taxation (House)
Primary sponsor / requestor: Requested by Representative Butler on behalf of Junction City Main Street, Inc.
Primary statutory change: Amends K.S.A. 2024 Supp. 79-3606 (sales tax exemptions)

Purpose and intent

The bill creates a targeted sales tax exemption for purchases made by Junction City Main Street, Inc., a nonprofit organization focused on downtown economic development in Junction City, Kansas. The intent is to exempt that organization’s purchases from Kansas sales tax.

Key provisions

  • Adds Junction City Main Street, Inc. to the list of entities whose purchases are exempt from the state sales tax (via amendment to K.S.A. 2024 Supp. 79-3606).
  • Repeals the existing version of that statutory section and replaces it to incorporate the exemption (consistent with the bill language as introduced).
  • Effective date: the exemption would take effect July 1, 2025.

Fiscal impact (from Kansas Division of the Budget fiscal note, March 7, 2025)

  • Estimated net decrease in state revenues: $6,500 annually beginning in FY 2026.
    • State General Fund reduction: $5,300 per year.
    • State Highway Fund reduction: $1,200 per year.
  • One‑time administrative cost to the State General Fund of $1,340 in FY 2026 for the Department of Revenue to revise and reissue sales tax forms and publications.
  • The FY 2026 Governor’s Budget Report did not reflect these effects.

Who would be affected

  • Primary beneficiary: Junction City Main Street, Inc. — purchases made by this nonprofit would be exempt from state sales tax.
  • State finances: modest recurring revenue loss to the State General Fund and State Highway Fund.
  • Local governments: likely a net reduction in local sales tax collections (local option sales taxes are typically collected on the same base); local entities that rely on local sales tax receipts could see reduced receipts.
  • STAR bond projects: the fiscal note notes a potential to reduce revenues pledged to STAR bond projects; the effect on the viability of any specific project is unknown.
  • Administrative: Kansas Department of Revenue would incur minimal one‑time administrative costs and ongoing adjustments to tax administration.

Timeline / procedural notes

  • Effective date specified as July 1, 2025; fiscal effects begin in FY 2026 (state fiscal year beginning July 1, 2025).
  • At time of the fiscal note, the bill had been referred to the House Committee on Taxation (status provided with bill information).
  • Fiscal note dated March 7, 2025 (Division of the Budget).

Bottom line

HB 2234 would grant a narrow, entity‑specific sales tax exemption to Junction City Main Street, Inc., producing a small recurring reduction in state and local sales tax revenues (about $6,500 annually statewide) and a small one‑time administrative cost. The exemption primarily benefits the named nonprofit; local governments and certain state funds would experience modest revenue losses.

Compiled from official sources — confirm details with the bill’s official record.

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