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HB 2126

Providing a sales tax exemption for purchases made by Kansas legal services, inc.

2025-2026 Regular Session

HB 2126 grants Kansas Legal Services a sales tax exemption on purchases, cutting its operating costs starting July 1, 2025, with modest state and local revenue losses.

Died in Committee
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Bill Summary · HB 2126

Summary — HB 2126 (Kansas)

Providing a sales tax exemption for purchases made by Kansas Legal Services, Inc.

Purpose / Intent

The bill creates a sales tax exemption for purchases made by Kansas Legal Services, Inc. (KLS), a nonprofit that provides legal and mediation services to low‑income Kansans. The stated intent is to reduce operating costs for KLS so it can better serve clients who need assistance meeting basic needs.

Key provisions

  • Amends K.S.A. 2024 Supp. 79‑3606 (the list of sales tax exemptions) to add an exemption for tangible personal property and services purchased directly by Kansas Legal Services, Inc. (text would repeal and replace the existing section to add this exemption).
  • Effective date: July 1, 2025.

(The bill text in the packet is limited to the amendment reference; it does not list further eligibility conditions beyond identifying KLS as the exempt nonprofit.)

Fiscal impact (as provided in the Division of the Budget fiscal note, Feb 20, 2025)

  • Estimated net reduction in state revenues: $29,000 per fiscal year beginning FY2026.
    • State General Fund: decrease of $24,000/year.
    • State Highway Fund: decrease of $5,000/year (Department of Transportation estimate).
  • Estimated reduction in local sales tax collections: $11,000/year.
  • One‑time administrative cost: $1,340 from the State General Fund in FY2026 to reissue sales tax publications and revise forms.
  • Fiscal estimates are based on data reported by Kansas Legal Services (13 locations statewide).

Who would be affected

  • Kansas Legal Services, Inc.: would no longer pay state (and likely corresponding local) sales tax on eligible purchases, lowering operating costs.
  • State finances: modest annual revenue loss ($24K SGF; $5K State Highway Fund).
  • Local governments: combined local sales tax receipts estimated to decline by about $11,000/year; local government associations noted this could reduce funds used for local services and could affect revenues pledged to STAR bond projects (impact unknown).
  • Vendors: sellers to KLS would make exempt sales and adjust tax collection accordingly.

Procedural / timeline notes

  • Introduced: January 27, 2025. Referred to the House Committee on Taxation.
  • Effective date if enacted: July 1, 2025.
  • The fiscal note states the estimated impacts would begin in FY2026 and recur annually. The cost to implement (reprinting guidance/forms) is small and one‑time.

Uncertainties / caveats

  • Estimates rely on KLS self‑reported data; actual revenue effects could differ.
  • The text provided is the introduced version amending the exemptions statute; final legislative language or legislative amendments could alter scope or effective dates.

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

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