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The Kansas Enterprise Zone program offers
non-retail firms both a sales tax exemption
as well as a 100% tax credit against the eligible
company’s total tax liability. Enterprise
Zone incentives are awarded to qualifying
businesses based upon type of business operation,
capital investment, and number of new jobs
created. Both manufacturing and non-manufacturing
businesses throughout the Hutchinson / Reno
County area are eligible for all E-Zone incentives.
Unused credits may be carried forward until
utilized.
ENTERPRISE
ZONE ENHANCED INCENTIVES
NON-METRO
COUNTIES |
| CONDITIONS |
|
 |
Manufacturing Firms
*Must create at least 2 net new jobs |
SALES TAX EXEMPTION
JOB CREATION TAX CREDIT
$2,500 per net new job
INVESTMENT TAX CREDIT
$1,000 per $100,000 of
Qualified Business Investment |
Non-Manufacturing Firms
*Must create at least 5 net new jobs |
SALES TAX EXEMPTION
JOB CREATION TAX CREDIT
$2,500 per net new job
INVESTMENT TAX CREDIT
$1,000 per $100,000 of
Qualified Business Investment |
Corporate Headquarters
and
Ancillary Support Facilities
*Must create at least 20 net new jobs |
SALES TAX EXEMPTION
JOB CREATION TAX CREDIT
$2,500 per net new job
INVESTMENT TAX CREDIT
$1,000 per $100,000 of
Qualified Business Investment |
|
Retail
*Cities
less than 2,500 population
*Must
create at least two net new jobs
|
SALES TAX EXEMPTION |
|
| *One-time credits may
be taken against 100 percent of income
and premium tax liability; unused credits
may be carried forward until exhausted.
Firms may amend their Income Tax Returns
for up to three years to take advantage
of the E-Zone Credits if they failed
to take advantage of allowable credits. |
|
| JOB
EXPANSION AND INVESTMENT TAX CREDITS |
The Job Expansion and Investment Tax Credit
Program provides business incentives for those
businesses that are ineligible for E-Zone
incentives. The program offers eligible firms
up to a 50% tax credit against the company’s
total tax liability. Unused credits may not
be carried forward.
| CONDITIONS |
BASIC INCENTIVES
All communities |
|
Retail
Firms
*Must
create at least 2 net new jobs
|
JOB CREATION
TAX CREDIT
$100/year per net new job
INVESTMENT
TAX CREDIT
$100 per $100,000 of Qualified
Business Investment
|
| *Credits may be taken
against 50 percent of annual income
tax liability. Credits may be deferred
for up to three years. |
|
QUALIFYING
FOR JOB EXPANSION
AND INVESTMENT TAX CREDITS |
A business must be a revenue producing, taxpaying,
and qualified Kansas facility to receive job
expansion or investment tax credits. Revenue
producing includes the operation and/or management
of enterprises that perform the following:
(1) Assemble, fabricate, manufacture,
or process agricultural, mineral, or manufactured
products
(2) Store, warehouse, distribute, or
sell agriculture, aquaculture, mining, or
manufactured products
(3) Feed livestock at a feedlot
(4) Operate laboratories or other facilities
for scientific, agricultural, aqua cultural,
animal husbandry, or industrial research,
development, or testing
(5) Perform services of any kind
(6) Feed aquatic plants and animals
at an aquaculture operation. Credits may be
deferred for up to three years; however, unused
credits may not be carried forward. |
| E-ZONE
INCENTIVES AND JOB EXPANSION AND INVESTMENT
TAX CREDITS |
Certain facility expansions and renovations
are eligible for tax credits under these two
programs. These changes must meet the requirements
of a "qualified business investment,"
or the difference between the final value
after expansion and the average value the
year prior to investment. The facility must
be owned and operated by the taxpayer before
improvements are made. |
| HIGH PERFORMANCE
INCENTIVE PROGRAM |
The state’s High Performance Incentive
Program (HPIP) is designed to retain existing
businesses and attract new, high-quality firms,
all while encouraging investments in worker
training and education.
Businesses are able to receive sales tax exemptions,
investment tax credits, workforce training
tax credits, and other incentives through
HPIP. The program’s incentives are available
to manufacturers, certain business service
firms, corporate headquarters, and "back-office"
operations of national or multi-national corporations.
Credits may be used against 100% of annual
income tax liability and carried forward for
10 years.
Please refer to the table on this
page for further explanation and requirements. |
Sales Tax Exemption
Electricity, gas, and water consumed during
manufacturing are exempt from Kansas sales
tax. An exemption may also be claimed on the
purchase of machinery, equipment, and certain
other tangible property if the business qualifies
for Job and Investment Tax Credits and is
located within an E-Zone. The sales tax exemption
may be applied to manufacturing machinery
and equipment, as well as quality and pollution
control equipment.
Other beneficial sales tax exemptions:
• Labor and services used in original
construction.
• Tangible personal property purchased
by a city from the proceeds of industrial
revenue bonds. At the time of initial purchase,
the building cost and all fixed equipment
are entitled to exemption from Kansas sales
tax at the time of initial purchase. The exemption
does not extend to movable machinery and equipment.
• Incoming and outgoing interstate wide
area telephone or transmission services (WATTS).
The gross receipts from sales of interstate
telephone or telegraph services that utilize
a WATTS line are specifically exempted from
sales tax.
Research Tax Credit
To stimulate increased research and development
activity, the state of Kansas offers an income
tax credit equal to 6.5% of an investment
in research and development, above an average
expenditure of the previous three-year period.
Inventory Tax Exemption
All merchant and manufacturer inventory is
exempt from property tax.
Business Machinery & Equipment
Credit
The state of Kansas provides an
annual tax credit against income, privilege,
and insurance company premiums taxes.
The credit equals 15% of the personal
property tax paid on commercial and
industrial machinery and equipment.
The amount of credit that exceeds the
tax liability will be refunded to companies
paying income tax.
| CURRENT AND
FUTURE CREDIT INCREASES |
|
|
| Example: |
| BUSINESS
MACHINERY AND EQUIPMENT CREDIT |
|
| Appraised
Value |
$3,000,000.00 |
| Assessment
Rate |
25% |
|
| Assessed
Valuation |
$
750,000.00 |
| Mills
(150.891) . |
.157035 |
|
| Personal
Property Tax |
$
117,776.25 |
| Machinery
& Equipment Credit |
15% |
|
| State
Tax Credit against Corporate Tax
Liability |
$
17,666.44 |
|
|
|
Industrial Revenue Bonds (IRBs)
Industrial Revenue Bonds are among the most
popular and cost efficient methods of financing
up to 100% of a growing business’ land,
buildings, and equipment. IRBs are securities
issued by cities and counties to provide
the funds for credit-worthy companies to
purchase land, purchase, remodel, or expand
existing facilities, or construct and equip
new facilities.
A limited amount of other developmental
and financing activities such as engineering,
legal, architectural, and bond underwriting
may also be financed from bond proceeds.
Interest received by IRB holders is exempt
from federal and state income tax. As a
result, the "cost of money" to
finance the project for the life of the
bond is reduced.
Most IRBs are structured over a 15-year
time period. Principal repayment terms are
flexible and can be structured to meet a
company’s specific cash flow needs.
The bonds are not usually callable (subject
to repayment prior to maturity) before the
third or fourth year.
Businesses using Industrial Revenue Bonds
as a financing option may also be eligible
for the following tax exemptions:
• For up to ten years after the bonds
are issued, property financed with an IRB
is exempt from ad valorem taxation.
• The cost of building materials and
permanent equipment is exempt from state
and local sales taxes.
Kansas Existing Industry Expansion Program
(KEIEP)
The Kansas Existing Industry Expansion Program
provides grants and loans to assist in financing
the expansion of small businesses in Kansas.
KEIEP awards are performance based and dependent
upon the project’s size. Expansions
by existing Kansas commercial enterprises
are eligible for awards.
Kansas Economic Opportunity Initiatives
Fund (KEOIF)
The Kansas Economic Opportunity Initiatives
Fund was established in recognition of the
need to assist Kansas communities and businesses
when an economic emergency or unique opportunity
arises.
Funds may be provided based on the following
factors:
• Major expansion of an existing Kansas
commercial enterprise
• Potential Kansas location of the
operations of
a major employer
• Departure from Kansas or substantial
reduction
of the operation of a major employer
Possible uses of KEOIF monies include site
and facility construction or improvements,
equipment purchases, and other project-related
costs associated with the establishment
or expansion of a Kansas facility.
Kansas Technology Enterprise Corporation
(KTEC)
The Kansas Technology Enterprise Corporation
operates several programs that provide financing
(and other assistance) for "high-tech"
Kansas businesses. These programs include
early seed capital and grants for research
and development, equipment and facilities,
training and technical consultation.
Export Loan Guarantee Program
The Kansas Export Finance Program was established
to help companies obtain financing to participate
in export transactions. Through one of the
few export finance programs in the entire
nation, the state of Kansas is able to issue
loan guarantees, encouraging lending institutions
to provide financing for small companies
to participate in export orders.
Community Development Block Grant (CDBG)
Certain communities receive an annual Community
Development Block Grant from the Kansas
Housing and Urban Development Department.
Those cities and counties that do not may
apply to the Kansas Department of Commerce
for block grant community development funds
in order to make water, sewer, or other
infrastructure improvements that are designed
to assist new or existing companies create
or retain jobs.
Kansas Venture Capital, Inc. (KVCI)
Kansas Venture Capital, Inc., is a statewide
risk capital system designed to meet the
special needs of businesses throughout Kansas.
The system seeks to create private risk
capital for investment in smaller Kansas
businesses.
All funds invested by the KVCI must be invested
in Kansas businesses for the sole purpose
of enhancing productive capacity within
the state, or for the purpose of adding
value to goods or services produced or processed
within the state.
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