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HB 2077

Relating to property tax exemption for nonprofit corporation low income housing; and prescribing an effective date.

2025 Regular Session

HB 2077 would grant a Kansas state sales tax exemption for purchases and contractor work by not-for-profit animal shelters and rescue networks to advance their mission.

Chapter 192, (2025 Laws): effective on the 91st day following adjournment sine die.
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Bill Summary · HB 2077

Summary — HB 2077 (2025) — Sales tax exemption for not‑for‑profit animal shelters and rescue networks (Kansas)

Status: Introduced Jan 24, 2025; Referred to House Committee on Taxation. Fiscal note issued Feb 20, 2025.

Main purpose

HB 2077 would create a state sales tax exemption for purchases and sales of tangible personal property and services when those transactions further the missions of not‑for‑profit animal shelters and rescue networks licensed under the Kansas Pet Animal Act. The exemption also would apply to contractors performing construction, renovation, equipping or maintenance work on facilities used as animal shelters.

Key provisions

  • Adds an exemption to K.S.A. 79-3606 (sales tax statute) for:
    • Purchases of tangible personal property and services by not‑for‑profit animal shelters and rescue networks licensed under the Kansas Pet Animal Act when used to further the organization’s mission (e.g., feeding, housing, veterinary care, adoption services, spay/neuter clinics, education, anti‑overpopulation measures).
    • Sales of personal property by those organizations when applicable.
    • Purchases by contractors for constructing, equipping, reconstructing, maintaining, repairing, enlarging, furnishing or remodeling an animal shelter facility.
  • Establishes reporting requirements for contractors using the exemption (details not specified in the fiscal note).
  • Creates a penalty for misuse: using the sales tax exemption for transactions determined not to be part of an allowable project is punishable as a misdemeanor.

Fiscal impact (as estimated by Kansas Division of the Budget / Department of Revenue)

  • Estimated reduction in state tax receipts:
    • FY 2026: total ($700,000) — State General Fund ($600,000) and State Highway Fund ($100,000).
    • FY 2027 and thereafter: total ($800,000) annually — State General Fund ($700,000) and State Highway Fund ($100,000).
  • Additional state administrative cost: $2,010 (one‑time) to reissue sales tax publications and revise forms (State General Fund).
  • Local sales tax receipts would decline (amount not estimated); the bill may affect revenues pledged to STAR bond projects (impact unknown).

Who is affected

  • Primary beneficiaries: not‑for‑profit animal shelters and rescue networks licensed under the Kansas Pet Animal Act that are not already tax‑exempt and are not for‑profit.
  • Contractors performing qualifying construction/renovation work for such shelters.
  • State budget: reduction in General Fund and State Highway Fund revenues.
  • Local governments: reduced local sales tax collections (extent unspecified).

Data basis and uncertainties

  • Department of Agriculture reports 288 licensed shelters/rescue networks in Kansas; about half are either for‑profit or already tax‑exempt via local government. The revenue estimates assume the remaining licensees would realize reduced taxable purchases of ~$700–800k annually. Future capital projects could increase revenue loss but are unspecified.
  • Contractor reporting details and enforcement mechanisms are not fully described in the fiscal note.

Next procedural step

  • Currently in House Committee on Taxation (referred Jan 24, 2025). Further committee action, hearings, and floor votes would determine advancement.

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

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