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Bill

HB 2098

Relating to tax credits for pension income.

2025 Regular Session

HB 2098 grants a sales-tax exemption on tangible goods for qualifying nonprofit community theaters, lowering costs for about six theaters starting July 1, 2025.

In committee upon adjournment.
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WeVote Research Nonpartisan
Bill Summary · HB 2098

Summary — HB 2098 (Kansas): Sales tax exemption for not‑for‑profit community theaters

Main purpose
HB 2098 would add a sales tax exemption for purchases of tangible personal property by certain not‑for‑profit organizations that operate community theaters. The intent is to lower production and operating costs for qualifying community theaters by exempting their purchases from Kansas sales tax.

Key provisions

  • Amends K.S.A. 2024 Supp. 79‑3606 to create a new exemption for tangible personal property purchases made by qualifying not‑for‑profit community theaters.
  • Eligibility requirements (all must be met):
    • Creation and production of novel works for concerts or productions;
    • Employment of full‑time theater staff;
    • Governance by a board of directors that partners with theater staff, ensures sound business/financial practices, and connects the organization to the community;
    • A demonstrated, strong educational commitment to the local community;
    • A commitment to providing ongoing live theater using available local resources.
  • Effective date: exemption would take effect July 1, 2025.

Fiscal impact (estimated)

  • Estimated annual reduction in state revenues beginning FY2026: $169,500.
    • State General Fund: approximately $139,000 decrease.
    • State Highway Fund: approximately $30,500 decrease.
  • Estimated reduction in local sales tax collections: approximately $60,500 in FY2026 (exact amount unknown).
  • One‑time administrative cost (reissuing guidance, issuing exemption certificates): $1,340 (State General Fund, FY2026).
  • Estimates were based on six identified non‑profit theaters statewide that meet the bill’s criteria.
  • The bill could reduce revenues pledged to STAR bond projects; the magnitude and effect on project viability are unknown.

Who would be affected

  • Primary beneficiaries: not‑for‑profit community theaters that meet the specified eligibility criteria (estimated six currently identified).
  • Secondary effects: state and local governments (reduced sales tax receipts); potentially STAR bond projects that rely on local sales tax revenues.

Legislative status & procedure

  • Introduced: January 24, 2025 (filed at request of Rep. Sanders; introduced by House Committee on Taxation).
  • Hearing: Jan. 30, 2025 (House Committee on Taxation).
  • Current status: Committee report recommending bill be passed by the House Committee on Taxation.
  • If enacted, exemption effective July 1, 2025.

Stakeholder positions

  • Proponents (testimony): representatives of Music Theatre Wichita, Salina Community Theatre, and other community theaters — argue the exemption reduces production costs and aligns theater treatment with other community arts organizations.
  • Opponents (written): League of Kansas Municipalities — expressed concern the exemption would erode the sales tax base without a clear distinguishing justification.

For policymakers and stakeholders, the principal tradeoff is reduced operating costs for qualifying community theaters versus modest, ongoing revenue losses for state and local government budgets.

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

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