What are the new Kansas privilege tax rates for banks starting in tax year 2024?

Plain-English summary

Kansas Notice 24-11 explains cuts to the Kansas privilege tax -- the tax imposed on certain financial institutions -- made by 2024 Special Session Senate Bill 1, Sections 12 and 13. The privilege tax has two parts: a "normal tax" and a "surtax." The bill lowered the normal tax rate but left the surtax rates unchanged, effective for tax year 2024 and all tax years after.

• National banking associations and state banks (K.S.A. 79-1107). Before the change, the normal tax was 2.25% and the surtax was 2.125%. For tax year 2024 and after, the normal tax rate is reduced to 1.94%, while the surtax stays at 2.125%.
• Trust companies and savings and loan associations (K.S.A. 79-1108). Before the change, the normal tax was 2.25% and the surtax was 2.25%. For tax year 2024 and after, the normal tax rate is reduced to 1.93%, while the surtax stays at 2.25%.

What this means for you

Banks, trust companies, and savings and loan associations doing business in Kansas

• If you are a national banking association or state bank, your normal privilege tax rate is 1.94% for tax year 2024 and after (surtax unchanged at 2.125%).
• If you are a trust company or savings and loan association, your normal privilege tax rate is 1.93% for tax year 2024 and after (surtax unchanged at 2.25%).
• The cuts apply to institutions located in or doing business in Kansas.

Common questions

Who does the privilege tax apply to? National banking associations, state banks, trust companies, and savings and loan associations located in or doing business in Kansas.

What is the new normal tax rate for banks? 1.94% for tax year 2024 and after (down from 2.25%).

What is the new normal tax rate for trust companies and savings and loans? 1.93% for tax year 2024 and after (down from 2.25%).

Did the surtax change? No. The surtax stays at 2.125% for banks and 2.25% for trust companies and savings and loan associations.

Citations and references

• Senate Bill 1 (2024 Special Session) -- Sections 12 and 13 reduced the privilege tax normal rates.
• K.S.A. 79-1107 -- privilege tax on national banking associations and state banks; normal rate reduced to 1.94% for tax year 2024 and after.
• K.S.A. 79-1108 -- privilege tax on trust companies and savings and loan associations; normal rate reduced to 1.93% for tax year 2024 and after.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: Notice 24-11

Original ruling text

Policy and Research
109 SW 9th Street Phone: 785-368-8222
PO Box 3506 Fax: 785-296-1279
Topeka KS 66601-3506 www.ksrevenue.gov
Mark A. Burghart, Secretary Laura Kelly, Governor

                                       NOTICE 24-11

                             PRIVILEGE TAX RATE CHANGES

                                      (JULY 1, 2024)

  During the 2024 Special Legislative Session, Senate Bill 1 was passed and signed into law.

Sections 12 and 13 of the Bill amend K.S.A. 79-1107 and K.S.A 79-1108 to reduce the rates of
Kansas privilege tax.

   Section 12 of the Bill amends K.S.A. 79-1107 to reduce the rate of privilege tax imposed on

national banking associations and state banks located or doing business in Kansas. Prior to
amendment the normal tax was 2.25%, and the surtax was 2.125%. For tax year 2024, and all tax
years thereafter, the normal tax rate is reduced to 1.94%, while the surtax rate remains at 2.125%.

   Section 13 of the Bill amends K.S.A. 79-1108 to reduce the rate of privilege tax imposed on

trust companies and savings and loan associations located or doing business in Kansas. Prior to
amendment the normal tax was 2.25%, and the surtax was 2.25%. For tax year 2024, and all tax
years thereafter, the normal tax rate is reduced to 1.93%, while the surtax rate remains at 2.25%.

                                  TAXPAYER ASSISTANCE

  Additional copies of this notice, forms or publications are available from our website,

www.ksrevenue.gov. If you have questions about this Notice, please contact:

                               Taxpayer Assistance Center
                              Kansas Department of Revenue
                              Scott Office Building, 1st Floor
                                     120 SE 10th Ave
                                      P. O. Box 3506
                                 Topeka, KS 66601-3506
                                   Phone: 785-368-8222
                                    Fax: 785-291-3614