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The structure of Kansas' financial incentives, tax levies,
and tax credits has been thoughtfully planned to be fair and favorable for
your business. Our tax basis ensures that no single industry is
disproportionately burdened. Our incentives reflect an awareness of
what it takes to attract and retain the companies who provide jobs for
Kansans. Also, our state is constitutionally restrained from
overspending, providing a foundation of fiscal integrity for our business
climate. According to the 1999 Development Report
Card for the state, "Kansas has one of the 15 best revenue systems-it has
balanced and stable revenue sources and is fairly equitable as well".
Regional Financial Associates ranked Kansas in the top third in a
measurement of state and local tax burdens as part of their 1999 Cost of
Doing Business Index.
We believe you will find the incentive and tax program
information below favorable to your business. We hope you give us the
opportunity to place a team of Business Development professionals at your
service.
ECONOMIC DEVELOPMENT TAX ABATEMENT ASSISTANCE PROGRAM
KANSAS ENTERPRISE ZONE ACT
HIGH PERFORMANCE INCENTIVE PROGRAM
Kansas Economic Opportunity Initiatives Fund and
Kansas Existing Industries Expansion Program
COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) PROGRAM
PRIVATE ACTIVITY BONDS (PABs)
TAX EXEMPTIONS IN CONNECTION WITH THE USAGE OF INDUSTRIAL REVENUE BONDS
PROPERTY TAX EXEMPTIONS
EXPORT LOAN GUARANTEE PROGRAM
Sales Tax Exemption on Manufacturing Machinery and
Equipment
RESEARCH & DEVELOPMENT TAX CREDITS
CHILD DAY CARE TAX CREDITS
ECONOMIC DEVELOPMENT TAX ABATEMENT ASSISTANCE PROGRAM
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JOB EXPANSION
AND INVESTMENT TAX CREDIT ACT OF 1976
Provides a Job Expansion Tax Credit of $100/year for ten years, for each
qualified business facility employee. A ten-year Investment Tax Credit
of $100/per year for each $100,000 of qualified capital investment.
These credits can be used to offset up to 50 percent of a company's annual
Kansas income, premium, or privilege tax liability. Unused credits may
not be carried forward from year to year.
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KANSAS ENTERPRISE ZONE ACT
The Kansas Enterprise Zone Act establishes a
non-metropolitan regional business incentive program and provides for
business expansion and development incentives on a statewide basis.
The type and amount of the incentive available is dependent on 1) the
location of the business; 2) the type of business, i.e. retail,
manufacturing, or non-manufacturing; and 3) the number of new jobs created
through a qualified building, expansion, or renovation project.
Businesses throughout the state may be eligible for 1)
a Sales Tax Exemption on the personal property, materials, and services
associated with the project; 2) a Job Creation Tax Credit; and 3) an
Investment Tax Credit. Tax credits may be used to offset up to 200
percent of the business' annual Kansas income tax liability. Unused
credit may be carried forward indefinitely if minimum employment is
maintained.
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HIGH PERFORMANCE INCENTIVE
PROGRAM
The High Performance Incentive Program (HPIP) provides
incentives to qualified companies that make significant investment in
employee training and pay higher than average wages. To qualify, a
for-profit business must 1) pay higher than average wages; and 2) invest at
least two percent of its total costs in employee training or participate in
the state's KIT/KIR/SKILL work force training programs.
Non-manufacturing businesses must generate more than
half of revenues form out-of-state businesses, government agencies, or
Kansas manufacturers. Farming, mining, construction, retail, and
wholesale. distribution businesses are generally not eligible.
Incentives include 1) a Sales Tax Exemption; 2) a
potentially substantial Training Tax Credit; 3) a generous Investment Tax
Credit; and 4) priority consideration for other business assistance programs
offered through KDOC&H, KTEC, and MAMTC. Tax credits may be used to
offset 100 percent of the business' annual Kansas income tax liability.
Unused investment tax credits may be carried forward and must be used within
a ten-year time frame.
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KANSAS ECONOMIC OPPORTUNITY INITIATIVES FUND (KEOIF) AND KANSAS EXISTING
INDUSTRIES EXPANSION PROGRAM (KEIEP)
KEIOF and KEIEP provide the state with a funding
mechanism to address the creation/retention of jobs presented by unique
opportunities or emergencies. The funds have a higher level of
flexibility than do many of the other state financing programs and allow the
state to participate as a funding source when other options have been
exhausted.
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COMMUNITY
DEVELOPMENT BLOCK GRANT (CDBG) PROGRAM
The state administers federal funds through the CDBG
Program. Economic development is a major use of CDBG funds in Kansas
through grants awarded to non-entitlement cities and counties for the
support of local firms. A city or county government must be the
applicant and serve as the intermediary for funds awarded. CDBG
funding is a competitive process and applicants must meet a number of
federal requirements and state guidelines to qualify for consideration.
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PRIVATE ACTIVITY BONDS (PABs)
The state has the authority, under the Federal Tax
Code, to provide local units of government the ability to issue tax-exempt
bonds (IRBs) for facility and equipment financing for qualifying
manufacturers and processors. The reduced financing costs generated
through these bonds are passed through to the company. The Kansas
Department of Commerce & Housing administers the tax-exempt PAB authority,
which is available to finance Kansas projects.
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TAX EXEMPTIONS IN CONNECTION WITH THE USAGE OF INDUSTRIAL REVENUE BONDS
Properties financed with the proceeds of an IRB issue can
be exempt from property taxation for a period of ten years. In
addition, the cost of building materials and permanently installed equipment
are exempt from state and local taxes.
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PROPERTY TAX EXEMPTIONS
Property tax exemptions can be made available by the
governing body of a city or county for up to ten years. The exemptions
apply to land, building, machinery, and equipment for new or expanding
businesses. Qualification guidelines vary from entity to entity.
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EXPORT LOAN GUARANTEE PROGRAM
The export Loan Guarantee Program allows financial
institutions to provide working capital loans to help Kansas companies pay
for costs associated with an export transaction. The guarantee
protects the financial institution against exporter non-performance risk.
In addition to significantly reducing a lender's risk on an export loan,
expertise available through the Kansas Export Finance Program can assist a
lender in the area of international trade.
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SALES TAX EXEMPTION ON MANUFACTURING MACHINERY & EQUIPMENT
Manufacturing machinery and equipment used directly and
primarily for the purposes of manufacturing, assembling, processing,
finishing, storing, warehouse, or distributing articles of tangible personal
property intended for resale are exempt from sales tax.
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RESEARCH & DEVELOPMENT TAX
CREDITS
Tax credits for research and development may be claimed
at 6.5 percent of the amount which exceeds the business' average r&D
expenditures during the preceding three years. A maximum of 25 percent
of the total credits may be used in any given year and unused credits may be
carried forward indefinitely.
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CHILD DAY CARE TAX CREDITS
Tax credits are available to businesses that pay for or
provide child day-care services to their employees. The credit is 30
percent of the annual cost of providing the service and is not to exceed
$30,000 total credit. A credit of up to 50 percent, not to exceed
$45,000 may be earned during the first year on the cost of establishing a
child day care facility. Multiple taxpayers may work together to
establish such a facility.
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ECONOMIC
DEVELOPMENT TAX ABATEMENT ASSISTANCE PROGRAM
This program administered by the Business Development
division, provides technical application assistance as well as consulting
services to companies and communities applying for economic development and
/or industrial revenue bond (IRB) tax exemptions. The Assistance
Program serves as liaison between the applicant and the Board of Tax Appeals
to ensure quality service and enhance approval success.
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