MARC JACOBS
Hutch Post
Kansas lawmakers heard testimony this week on a proposal that would eventually eliminate property taxes statewide and replace them with a new surcharge on retail purchases.
The Kansas Senate Tax Committee held a hearing on Senate Bill 488, known as the Kansas Property Tax Freedom Act of 2026, which would phase out property taxes over several years and replace lost revenue through a statewide “fair share purchase surcharge.”
Under the proposal, property tax mill levies would be cut in half in 2026 and reduced to 25% of current levels in 2027. Beginning in 2028, property taxes on real and personal property would be eliminated entirely if voters approve a related constitutional amendment.
To offset the loss of property tax revenue, the bill proposes a new surcharge beginning in 2027. Purchases under $20 would be subject to a 7.6% surcharge, while purchases of $20 or more would carry a flat $1.60 fee per transaction. Retailers would collect the surcharge at the point of sale and remit it to the Kansas Department of Revenue.
Revenue from the surcharge would be distributed among several recipients, including 48% to school districts, 35% to cities, counties and other local governments, 12% to the state general fund, and 5% to a new Property Tax Freedom Reserve Fund. The reserve fund would help offset revenue losses during the transition and could eventually provide rebate payments to Kansas taxpayers if the fund exceeds $500 million.
Sen. Michael Murphy, a proponent of the bill, told committee members property taxes remain one of the most common concerns he hears from constituents.
“Every time I knock doors, property tax is a problem,” Murphy said. “I think we need to get out of the box and look at something that goes forward.”
Murphy acknowledged the proposal is not finalized but said the bill is intended to spark discussion on ways to provide meaningful property tax relief.
Several citizens and former lawmakers testified in support of the concept, arguing that rising property valuations and tax bills are putting financial pressure on homeowners and farmers.
Former state Rep. Carrie Barth told the committee property taxes are one of the biggest affordability issues facing Kansans.
“Property tax is the number one issue for our state,” Barth said. “People should not be taxed out of their homes.”
Other supporters said eliminating property taxes could attract new residents and businesses to Kansas while lowering the cost of homeownership.
Opponents and neutral conferees raised concerns about the proposal’s financial impact and implementation. Dave Trabert of the Kansas Policy Institute said the bill would require significant changes to the state’s school finance system and could reduce funding for local governments.
Trabert also noted the state lacks the transaction data needed to determine whether the proposed surcharge would generate enough revenue to replace property taxes.
Committee Chair Sen. Caryn Tyson said the proposal appears to require more development before moving forward. Lawmakers did not take immediate action on the bill following the hearing.
For the proposal to take effect, Kansas voters would first need to approve a constitutional amendment prohibiting property taxes, which could appear on the ballot in a future statewide election.