Delay of Refunds from FY 2009 to FY 2010 $ - $ - $ 15,795 $ (15,795) $ - Delay of Refunds from FY 2011 to FY 2012 $ - $ - $ - $ 7,150 $ (7,150)

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1 Updated: 3/6/009, 7:3 PM 009 Session - Summary of Federal Conformity Tax Provisions in HF 39-E, HF39-UE and HF 36 Dollars in thousands GOVERNOR HOUSE SENATE CONFERENCE AGREEMENT Bill # Authors FY 009 FY -3 FY 009 FY -3 FY 009 FY 009 FY 00 FY 0 FY 0 FY 03 Federal Conformity Acts HF39 / SF5 Lenczewski / Bakk The Heroes Earnings Assistance and Relief Tax Act of 008 $ 90 $ 40 $ 45 $ 90 $ 40 $ 45 $ 90 $ 40 $ 45 $ 90 $ 65 $ 75 $ 40 $ 80 $ 65 $ 45 The Heartland, Habitat, Harvest and Horticulture Act of 008 $ 45 $ 860 $ (370) $ 45 $ 860 $ (370) $ (35) $ 450 $ 45 $ 470 $ 390 $ 860 The Housing Assistance Tax Act of 008 $ 330 $ 760 $ (5) $ 345 $ 760 (negli.) (negli.) $ (5) $ 35 $ 30 $ 345 $ 390 $ 370 $ 760 The Emergency Economic Stabilization Act of 008 $ (6,705) $ 5,785 $ (5,500) $ 7,795 $ 5,785 $ (4,500) $ 4,0 $ 4,575 $ 8,795 $ 3,765 $,00 $ 5,785 Federal Conformity Subtotal $ 90 $ (6,90) $ 7,550 $ (5,795) $ 8,695 $ 7,550 $ 90 $ 40 $ 45 $ (4,795) $ 4,85 $ 5,40 $ 9,695 $ 4,705 $,845 $ 7,550 Corporate Franchise Tax Refunds Delay of Refunds from FY 009 to FY 00 $ 5,795 $ (5,795) Delay of Refunds from FY 0 to FY 0 $ 7,50 $ (7,50) Additional Interest on Delayed Refunds $ (50) $ (0) Corporate Franchise Tax Delay Subtotal $ 5,795 $ (8,695) $ (7,60) SF386 JMZ003 Amdmt Skoe Green Acres / Conservation Lands Property Tax Provisions unknown unknown unknown unknown unknown unknown unknown Subtotal unknown unknown unknown unknown unknown unknown unknown Net General Fund Impact $ 90 $ (6,90) $ 7,550 $ 390 $ 90 $ 40 $ 45 $ (4,795) $ 4,85 $ 5,40 $ 9,695 $ 4,705 $,845 $ 7,550 Prepared by: and Fiscal Staff (file: G:\FISCAL\TAXES FOLDER\!009 spreadsheets\009 cc39on March6096PM.xlsx)

2 009 Session: Federal Conformity Tax Provision Detail (HF39 E, HF 39 UE, HF 36) FY -3 FY 0- FY 009 FY 00 FY 0 FY 0- FY 0 FY 03 3 Federal Conformity Tax Acts I. Heroes Earned Retirement Opportunities Act of 006 Make Permanent the Election to Include Combat Pay as Earned Income for the Earned Income/Working Family Credit. (//08) (60) (90) (0) (60) (90) (0) (60) (90) (0) (60) (60) (55) (35) (90) (0) (0) (0) Treatment of Contributions of Military Death Gratuities to Certain Tax-Favored Accounts (6/7/008) (Negl.) 0 0 (Negl.) 0 0 (Negl.) 0 0 (Negl.) (Negl.) (Negl.) (Negl.) 0 (Negl.) (Negl.) 0 Suspension of Five-Year Period for Exclusion of the Gain on the Sale of a Principal Residence for Certain Peace Corp Volunteers (//08) (Negl.) 0 0 (Negl.) 0 0 (Negl.) 0 0 (Negl.) (Negl.) (Negl.) (Negl.) 0 (Negl.) (Negl.) 0 Suspension of Five-Year Period for Exclusion of the Gain on the Sale of a Principal Residence permanently for certain employees of the Intelligence Community (//) (Negl.) 0 0 (Negl.) 0 0 (Negl.) 0 0 (Negl.) (Negl.) (Negl.) (Negl.) 0 (Negl.) (Negl.) 0 Special Distribution Rules for Unused Health Benefits in Flexible Spending Arrangements of Individuals Called to Active Duty (6/8/08) (Negl.) 0 0 (Negl.) 0 0 (Negl.) 0 0 (Negl.) (Negl.) (Negl.) (Negl.) 0 (Negl.) (Negl.) 0 Impose Mark-to-Mark Regime on Individuals Who Expatriate (6/7/08) Act Sub Total Individual Income Act Sub Total - Share Corporate Franchise Tax Act Sub Total - Share II. The Heartland, Habitat, and Horticulture Act of 008 Extend the Special Rule for Contributions of Qualified Conservation Real Property (TY08, TY 09) (500) 0 (300) (00) (300) (300) (00) 0 (00) Deduction for Endangered Species Recovery Expenditures (//09) * (400) (50) (50) (350) (50) 0 0 (50) (50) (50) (00) (350) (30) (80) (50) Allowance of Like-Kind Exchange Treatment for Shares in a Mutual Ditch, Reservoir, or Irrigation Company (6/9/08) (Negl.) 0 0 (Negl.) 0 0 (Negl.) 0 (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) 0 Change the depreciation classification for race horses two years old or younger from 7-year to 3-year property * (80) (00) (0) (60) (00) 0 0 (0) (0) (60) (00) (60) (00) (00) (00) Temporary Relief for Kiowa County, Kansas, and Surrounding Area, Several Provisions * (Negl.) 0 (Negl.) (Negl.) 0 0 (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) 0 Limitation on Excess Farming Losses of Certain Taxpayers (//0),5,570 0,5, , ,570 Act Sub Total (370) (370) (370) (35) and Fiscal Staff, 3/6/009 G:\FISCAL\TAXES FOLDER\!009 spreadsheets\009 cc39on March6096PM.xlsx,

3 009 Session: Federal Conformity Tax Provision Detail (HF39 E, HF 39 UE, HF 36) FY -3 FY 0- FY 009 FY 00 FY 0 FY 0- FY 0 FY 03 3 Individual Income Act Sub Total - Share (370) (370) (370) (35) Corporate Franchise Tax Act Sub Total - Share III. The Housing Assistance Tax Act of 008 Additional Standard Deduction for State and Local Property Taxes (TY 08 only) Exclude from Alternative Minimum Taxable Income from Certain Tax-Exempt Housing Bonds (bonds issued after 7/30/08) (Negl.) (Negl.) 0 (Negl.) (Negl.) 0 (Negl.) (Negl.) 0 0 (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) State and Local Bond Exemption Extended to Bonds Guaranteed by Federal Home Loan Banks (bonds issues 7/3/08 to /3/0) (Negl.) (Negl.) 0 (Negl.) (Negl.) 0 (Negl.) (Negl.) 0 0 (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) Real Estate Investment Trust (REIT) Provisions (generally tax years beginning after 7/3/08) (00) (60) (Negl.) (00) (60) (Negl.) (Negl.) (30) (70) (00) (0) (50) (60) Gulf Opportunity (GO) Zone: elections to amend returns with Hurricane related casualty losses (7/30/08) (Negl.) 0 (Negl.) (Negl.) 0 (Negl.) (Negl.) (Negl.) 0 (Negl.) Gulf Opportunity (GO) Zone: Waive Commencement Date Requirement for Add'l Bonus Depreciation (//08) * (70) (Negl.) (5) (55) (Negl.) (5) (5) (35) (0) (55) (Negl.) (Negl.) (Negl.) Exclusion of Gain on Sale of Principal Residence Not to Apply to Nonqualified Use (//09) 500, , ,00 34 Act Sub Total (5) (5) (5) Individual Income Act Sub Total - Share Corporate Franchise Tax Act Sub Total - Share 0 (70) (Negl.) (5) (55) (Negl.) 0 0 (Negl.) (5) (5) (35) (0) (55) (Negl.) (Negl.) (Negl.) IV. Emergency Economic Stabilization Act of Emergency Economic Stabilization Provisions: Allow ordinary treatment for gain or loss from sale or exchange of certain preferred stock by certain financial institutions (//08) Extend exclusion of discharges of principal residence acquisition indebtedness from the gross income of individuals (//0 to /3/) (,000) (900) 0 (,000) (900) (,000) (,000) (500) (400) (900) and Fiscal Staff, 3/6/009 G:\FISCAL\TAXES FOLDER\!009 spreadsheets\009 cc39on March6096PM.xlsx, 3

4 009 Session: Federal Conformity Tax Provision Detail (HF39 E, HF 39 UE, HF 36) FY -3 FY 0- FY 009 FY 00 FY 0 FY 0- FY 0 FY Energy Improvement/Extension Provisions Extend 50% bonus depreciation for ethanol property to cellulosic biofuel plant property (0/4/08 to /3/) (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) Election to expense certain refineries: () Modification, effective 0/4/08 to /3/3; () Extension, effective // to /3/3. (500) (4,450) (00) (400) (4,450) (00) (00) (00) (00) (400) (,550) (,900) (4,450) Extend suspension of 00% of net income limitation on percentage depletion for oil and natural gas from marginal properties. (TY 009) (30) 0 (0) (0) 0 (0) (0) (0) 0 (0) Extend transportation fringe benefit to bicycle commuters (//09) (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) Extend energy efficient commercial buildings deductions for individuals (//09 to /3/3) (405) (365) (70) (335) (365) (70) (70) (60) (75) (335) (80) (85) (365) Extend energy efficient commercial buildings deductions for corporations (//09 to /3/3) (995) (890) (70) (85) (890) (70) (70) (400) (45) (85) (440) (450) (890) 0-year recovery period for qualified smart electric distribution property for corporations (30) (30) (0) (0) (30) (0) (0) (40) (80) (0) (30) (80) (30) Special 50% depreciation allowance for certain reuse and recycling property for Individual Income Tax (9//08) (65) (35) (0) (55) (35) (0) (0) (30) (5) (55) (0) (5) (35) Special 50% depreciation allowance for certain reuse and recycling property for Corporate Franchise Tax (9//08) (55) (90) (5) (30) (90) (5) (5) (70) (60) (30) (50) (40) (90) Extension of Individual Tax Provisions Deduction for tuition and related expenses (tax years 008 and 009) Deduction for educator classroom expenses, up to $50 (tax years 008 and 009) 0 0 (,000) (,000) Additional standard deduction for state and local property taxes (Tax Year 009) Tax-free IRA distributions up to $00K for charitable purposes for taxpayers age 70.5 years and older (tax years 008 and 009) (,650) (00) (,300) (,350) (00) (,300) (,300) (,50) (00) (,350) (00) (00) (00) Treatment of certain dividends of regulated investment companies (tax years 008 and 009) (650) 0 (350) (300) 0 (350) (350) (300) 0 (300) Extension of Business Tax Provisions Individual Income Tax: () extend for improvements to leasehold/restaurant property; () Include new restaurant property and improvements to retail property. (6,00) (,900) (,650) (3,450) (,900) (,650) (,650) (,400) (,050) (3,450) (,000) (900) (,900) Corporate Franchise Tax: () extend for improvements to leasehold/restaurant property; () Include new restaurant property and improvements to retail property. (8,700) (,650) (3,800) (4,900) (,650) (3,800) (3,800) (3,400) (,500) (4,900) (,400) (,50) (,650) and Fiscal Staff, 3/6/009 G:\FISCAL\TAXES FOLDER\!009 spreadsheets\009 cc39on March6096PM.xlsx, 4

5 009 Session: Federal Conformity Tax Provision Detail (HF39 E, HF 39 UE, HF 36) FY -3 FY 0- FY 009 FY 00 FY 0 FY 0- FY 0 FY 03 organizations for purposes of the unrelated business income tax for corporate franchise tax (tax year 008 and tax year 009) (30) 0 (70) (50) 0 (70) (70) (50) 0 (50) Extend basis adjustment to S corporation stock for charitable contributions of property (tax year 008 and 009) (380) (60) (00) (80) (60) (00) (00) (50) (30) (80) (30) (30) (60) Extend partial expensing for advanced mine safety equipment for corporate income tax (tax year 009) (5) (Negli.) (0) (5) (Negli.) (0) (0) (5) (Negl.) (5) (Negl.) (Negl.) (Negli.) Extend accelerated depreciation for business property on Indian Reservations for individual income tax (tax year 008 and 009) (,600) 450 (900) (700) 450 (900) (900) (600) (00) (700) Extend accelerated depreciation for business property on Indian Reservations for corporate franchise tax (tax year 008 and 009) (,00) 300 (700) (500) 300 (700) (700) (400) (00) (500) Extend expensing of Brownfield's environmental remediation costs for individual income tax (tax years 008 and 009) (890) 40 (500) (390) 40 (500) (500) (450) 60 (390) Extend expensing of Brownfield's environmental remediation costs for corporate franchise tax (tax years 008 and 009) (,60) 00 (750) (50) 00 (750) (750) (600) 90 (50) Extend enhanced deduction for qualified computer contributions for corporate franchise tax (tax years 008 and 009) (,000) corporations: () extensions effective tax years 008 and 009; () suspend percentage limitation for farmers and ranchers effective for tax year 008 (630) 0 (350) (80) 0 (350) (350) (80) 0 (80) Extend enhanced deduction for contributions of book inventory donated to public schools for corporate franchise tax (tax years 008 and 009) (40) 0 (90) (50) 0 (90) (90) (50) 0 (50) Expensing for qualified film & TV productions for individual income tax: () extensions to tax year 009; () modifications, effective tax years 008 and 009. (450) 50 (350) (00) 50 (350) (350) (300) 00 (00) Expensing for qualified film & TV productions for corporate franchise tax: () extensions to tax year 009; () modifications, effective tax years 008 and 009. (400) 0 (300) (00) 0 (300) (300) (50) 50 (00) Reduce recovery period for certain farming business machinery and equipment from 7 to 5 years (tax year 009) (4,00) (,700) (800) (3,300) (,700) (800) (800) (,800) (,500) (3,300) (,400) (,300) (,700) Midwestern Disaster Relief Provisions Temporary suspension of limitations on charitable contributions for relief efforts in midwest disaster area (disaster date to /3/08) (70) 35 (340) (340) (340) Other provisions (00) Negli. (60) (40) Negli. (60) (60) (40) (Negl.) (40) (Negl.) Negl. Negli. Nat'l Disaster Relief for Federally Declared Disaster Areas in 008 and Individual Casualty loss provisions (50) 0 (50) (00) 0 (50) (50) (00) 0 (00) Expensing of qualified disaster expenses for environ. Remediation, debris removal, demolition of structures, repairs (tax years 008 and 009) (Negl.) Negl. (Negl.) (Negl.) Negl. (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) Negl. Negl. and Fiscal Staff, 3/6/009 G:\FISCAL\TAXES FOLDER\!009 spreadsheets\009 cc39on March6096PM.xlsx, 5

6 009 Session: Federal Conformity Tax Provision Detail (HF39 E, HF 39 UE, HF 36) FY -3 FY 0- FY 009 FY 00 FY 0 FY 0- FY 0 FY year carry back of net operating losses for qualified disaster losses (tax years 008 and 009) (60) 0 (0) (40) 0 (0) (0) (30) (0) (40) property for individual income tax: () equipment, effective tax years 008 and 009; () real property, effective for tax eyars 008 to 0. (50) (5) (40) (0) (5) (40) (40) (60) (50) (0) (5) Negl. (5) property for corp franchise tax: () equipment, effective tax years 008 and 009; () real property, effective for tax eyars 008 to 0. (700) (05) (75) (55) (05) (75) (75) (75) (50) (55) (5) 0 (05) Increased Section 79 expensing for qualified disaster property for individual income tax(tax years 008 and 009) (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) Increased Section 79 expensing for qualified disaster property for corporate franchise tax(tax years 008 and 009) (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) Paul Wellstone/Pete Domenici Mental Health Parity and Addiction Equity Act of 008 Requirements changed for employer-sponsored group health plans to qualify for employee income exclusion (0/3/09) (,300) (,350) 0 (,300) (,350) 0 0 (400) (900) (,300) (,00) (,50) (,350) Revenue Raising Provisions Modify tax treatment of nonqualified deferred compensation from certain tax indifferent parties (//09) 30,000, ,000, ,400,600 30,000,00 0,00, Act Sub Total 0 (6,705) 5,785 (5,500) 7,795 5, (4,500) (4,500) 4,0 4,575 8,795 3,765,00 5, Individual Income Act Sub Total - Share 0 8,80 3,660 (9,00) 6,00 3, (8,00) (8,00) 0,070 6,950 7,00 7,90 6,470 3,660 9 Corporate Franchise Tax Act Sub Total - Share 0 (5,55) (7,875) (6,300) (8,5) (7,875) (6,300) (6,300) (5,850) (,375) (8,5) (3,45) (4,450) (7,875) Net Federal Conformity Grand Total 90 (6,90) 7,550 (5,795) 8,695 7, (4,795) (4,795) 4,85 5,40 9,695 4,705,845 7,550 and Fiscal Staff, 3/6/009 G:\FISCAL\TAXES FOLDER\!009 spreadsheets\009 cc39on March6096PM.xlsx, 6