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HB 2162

Relating to Willamette Valley brassica production.

2025 Regular Session Introduced by Anna Scharf

Expands sales tax exemption to cover installation services for reconstruction, restoration, remodeling, renovation, repair, or replacement of buildings or facilities.

In committee upon adjournment.
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WeVote Research Nonpartisan
Bill Summary · HB 2162

HB 2162 — Kansas (2025)

Excluding from sales taxation the service of installing or applying tangible personal property for the reconstruction, restoration, remodeling, renovation, repair or replacement of a building or facility

Purpose / Intent

HB 2162 would expand an existing sales tax exemption on construction-related services. Under current Kansas law, sales tax is not imposed on services that install or apply tangible personal property when that work is part of original construction which becomes part of real estate. This bill would extend that exemption to cover the same services when performed for reconstruction, restoration, remodeling, renovation, repair or replacement of a building or facility.

Key provisions

  • Amends K.S.A. 2024 Supp. 79-3603 to exclude from taxable services the act of installing or applying tangible personal property when done in connection with:
    • reconstruction, restoration, remodeling, renovation, repair, or replacement of a building or facility (in addition to original construction).
  • Effective date for the sales tax exemption: July 1, 2025.
  • The bill also repeals the existing version of the section it amends (technical legislative housekeeping).

Who would be affected

  • Businesses and consumers:
    • Contractors, subcontractors, repairmen and other service providers who install or apply tangible personal property as part of repair/renovation work would no longer collect/pay sales tax on those services.
    • Property owners (residential, commercial, institutional) paying for repair/renovation services would see reduced sales-tax-related costs for the affected services.
  • State and local governments:
    • State General Fund and State Highway Fund would see reduced sales tax receipts.
    • Local governments would see reductions in local option sales tax receipts (Department of Revenue did not produce a specific local estimate).
  • Special financing:
    • Potential impact on revenues pledged for STAR bond projects (uncertain).

Fiscal impact (from Kansas Division of the Budget / Department of Revenue)

  • Estimated state revenue loss (first full fiscal year of effect — FY2026): approximately $77.0 million total
    • State General Fund: ≈ $63.1 million decrease
    • State Highway Fund: ≈ $13.9 million decrease
  • Projected annual revenue decreases grow modestly over time:
    • FY2027: total ≈ $86.6 million ($71.0M SGF; $15.6M SHF)
    • FY2028: total ≈ $89.3 million
    • FY2029: total ≈ $92.1 million
    • FY2030: total ≈ $95.0 million
  • Small one-time administrative cost: $1,340 (State General Fund) to reissue guidance/forms.
  • KDOT notes reduced State Highway Fund receipts may require corresponding reductions to planned transportation projects.

(Estimate methodology: DOR reviewed construction-industry deductions reported 2019–2023 and attributed ~27.5% of those deductions to reconstruction/restoration/remodeling/repair/replacement.)

Procedural status & timeline (selected actions)

  • Filed: January 28, 2025
  • Introduced: January 30, 2025
  • Referred to Committee on Taxation: January 31, 2025
  • Committee and floor actions in March 2025 (committee hearings, readings); re-referred to Rules Committee May 31, 2025
  • Current status (as provided): Referred to Committee on Taxation

Sponsors / Requesting party

  • Sponsors (as listed): Quantá Crews (primary), Stacey Travers (cosponsor), Nancy Gutierrez (cosponsor).
  • The bill text also notes it was requested by Scott Schneider on behalf of the Associated General Contractors of Kansas.

Notes and caveats

  • The Department of Revenue did not estimate the reduction in local sales tax revenue; local governments and entities relying on local sales taxes could be materially affected.
  • The fiscal estimates assume the exemption begins July 1, 2025; actual impacts depend on final bill language, enactment date, and taxpayer behavior.

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

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