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HB 2231

Virginia Opportunity Scholarship Grant Program; established.

2025 Regular Session Introduced by Mike Cherry

The bill broadens personal and corporate tax relief, expands homestead tax freezes, shifts to single-sales-factor apportionment, and adds property tax exemptions for certain person

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Bill Summary · HB 2231

Summary — HB 2231 (2025)

Status: Approved by the Governor (signed April 24, 2025)

This bill makes a package of changes to state tax law—principally income-tax personal exemptions, the “tax freeze” option of the Homestead Property Tax Refund program, corporate income tax apportionment and rate mechanics, and certain property tax exemptions for personal property. Several provisions take effect for specified tax years beginning 2024–2025; other mechanics trigger later certifications and rate changes.

Main purpose

  • Clarify and expand certain personal income tax exemptions (notably for head-of-household filers and 100% permanently disabled veterans).
  • Modify eligibility and calculation rules for the Homestead Property Tax “tax freeze” refund option.
  • Reform corporate and business income apportionment rules (move toward single-sales-factor or receipts-factor apportionment for various taxpayers) and establish a mechanism to reduce corporate tax rates based on actual receipts growth.
  • Create property-tax exemptions for specified personal property (watercraft-related equipment, off‑road vehicles, motorized bicycles, certain trailers).

Key provisions and effective dates

Income tax personal exemptions
- Beginning tax year 2024: taxpayers filing as head of household receive an additional Kansas personal exemption of $2,320.
- Increase additional personal exemption for 100% permanently disabled veterans to $2,320 (effective tax year 2025 and thereafter).

Homestead Property Tax Refund (“tax freeze”) changes
- For only the “tax freeze” refund option, “household income” is redefined as total Kansas adjusted gross income (K‑AGI).
- Income eligibility threshold increased to $80,000 for tax year 2025 (with statutory formula retained for future cost‑of‑living adjustments).
- Maximum base-year appraised value increased from $350,000 to $450,000 beginning in base year 2024; thereafter the cap rises annually based on the 10‑year average statewide residential valuation change.
- For taxpayers who become newly eligible due to the value cap increase, the refund base year is 2024 or the first year of eligibility, whichever is later.

Corporate and business apportionment / tax rate mechanics
- Establishes apportionment rules: business income apportioned by single-sales‑factor; financial institutions apportioned by receipts factor; manufacturers who sell alcoholic liquor apportioned under a three-factor test (specifics in statute).
- Requires use of single-sales factor consistent with the multistate tax compact in applicable cases and provides specified deductions when electing single-sales or receipts factors.
- Creates a certification process at end of FY2028 to determine corporate receipts growth; the Secretary of Revenue will compute and publish a corporate income tax rate reduction (rounded down to nearest 0.1%) to take effect for taxable years commencing after December 31, 2028, if receipts exceed the prior year.

Property tax exemptions (personal property)
- Exempts, for taxable years commencing after December 31, 2025: off‑road vehicles (not highway-operated), certain motorized/electric bicycles and scooters, motorized wheelchairs, personal-use trailers (gross weight ≤15,000 lbs), and “marine equipment” (watercraft trailers and outboard motors) from ad valorem property tax.

Who is affected

  • Head‑of‑household filers and 100% permanently disabled veterans (income tax).
  • Seniors and disabled veterans using the Homestead Property Tax “tax freeze” refund (income and home‑value eligibility).
  • Corporations, manufacturers, and financial institutions doing business in the state (apportionment and potential future corporate tax rate reductions).
  • Owners of specified personal property (recreational vehicles, marine equipment, certain trailers) — these items become exempt from property tax beginning tax years after Dec 31, 2025.

Fiscal impact (estimates)

  • Increased exemption for disabled veterans: ~ $20,000 per year reduction to State General Fund (FY2026 onward).
  • Homestead refund program changes: estimated SGF reduction of about $8.5 million (FY2026), $17.4 million (FY2027), and $26.8 million (FY2028).
  • Other apportionment and corporate‑tax mechanics could affect future revenues depending on apportionment shifts and the FY2028 receipts certification; no immediate SGF estimates provided for those items in the available documents.

Implementation / timing notes

  • Head‑of‑household exemption: effective for tax year 2024 and thereafter.
  • Disabled veteran exemption increase: effective tax year 2025 and thereafter.
  • Homestead refund income threshold and appraisal cap changes: apply beginning tax year 2025 (income threshold) and base year 2024 / base years commencing after Dec 31, 2024 (appraised-value cap mechanics).
  • Personal property exemptions: taxable years commencing after Dec 31, 2025.
  • Corporate tax‑rate reduction mechanism: certification at end of FY2028; any rate reduction published by Oct 1, 2028 and effective for taxable years commencing after Dec 31, 2028.

Sources: Committee reports, fiscal note, and enrolled/engrossed versions of HB 2231 as enacted (statutory amendments to K.S.A. sections cited in the enrolled bill).

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

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