Enacting the Kansas property tax freedom act of 2026, providing for the phased elimination of property taxation and for revenue replacement grants to taxing subdivisions, establishing the Kansas fair share purchase surcharge and providing such revenue to taxing subdivisions, the state general fund and the new property tax freedom reserve fund and providing for freedom dividend rebates.

SB 488 proposes phasing out property taxes in Kansas over three years: limiting mill levies to 50% of 2025 levels in 2026, 25% in 2027, and eliminating them entirely for all property starting in 2028. To offset lost revenue for local governments, it creates a new "Kansas fair share purchase surcharge" on retail transactions (7.6% for purchases under $20 or $1.60 flat for $20+), with the collected funds distributed to school districts, counties, cities, and other taxing subdivisions via revenue replacement grants. The bill requires voter approval of a constitutional amendment in 2026 for the tax changes to take effect. It also establishes a "property tax freedom reserve fund" to manage these transition funds and provides for "freedom dividend rebates" to residents.