Machinery & Equipment Expensing Deduction
Effective January 1, 2012, Kansas taxpayers will be allowed to claim an expense deduction for business machinery and equipment, placed in service in Kansas during the tax year.  The one-time deduction is allowed for each qualified purchase of machinery and equipment in the year that it is placed in service.  Unused expense deduction is treated as a Kansas net operating loss that may be carried forward for 10 years.  Eligible investment is machinery and equipment depreciable under the Modified Accelerated Cost Recovery System (MACRS) in section 168 of the Internal Revenue Code, or canned software as defined in section 197 of the Internal Revenue Code. Examples of eligible equipment include manufacturing equipment, office furniture, computers, software and racking.

Promoting Employment Across Kansas (PEAK)
This program offers qualified companies the ability to retain 95 percent of their payroll withholding tax for up to five to seven years.  PEAK is available to new operations in Kansas as well as relocated operations to the state.  In 2013, it will be available for qualifying business retention projects as well.  Companies need to create at least 10 new jobs within two years in metropolitan areas or five new jobs within two yeras in all other counties of the state.  High-impact projects that create 100 new jobs within two years can retain 95 percent of payroll withholding tax for up to seven to 10 years.  The number of years that the withholding tax can be retained depends on how much the annual median or average wage of the jobs at the Kansas worksite will exceed the current county median wage and the discretion of the Secretary of the Kansas Department of Commerce.

Wind and Solar Bond Financing
This allows for up to $5 million in bond financing per project for eligible wind and solar energy manufacturers.  The bonds are paid off from the payroll withoholding tax of the new jobs.  To qualify, a project must create at least 200 new jobs within five years, pay at least a $32,500 average salary and generate a minimum capital investment of $30 million.

Industrial Revenue Bonds (IRBs)
Industrial Revenue Bonds are a popular method of financing up to 100 percent of a growing business' land, building and equipment.  IRBs are securities issued by cities and counties to provide funds for creditworthy companies to acquire land, construct and equip new facilities or remodel and expand existing facilities.  IRBs allow fixed-rate financing for the life of the bond for the project.

Community Development Block Grant (CDBG)
Eligible small city and county governments may apply for Community Development Block Grant economic development funds to make water, sewer, rail spur, roadway or ther infrastructure improvements designed to assist companies in creating jobs.  These funds may also be used by a business to acquire land or buildings, construct or renovate facilities, purchase machinery and equipments or for working capital.  Under this program, companies can apply for up to $35,000 per job created with a maximum limit of $750,000.  At least 51 percent of the jobs created with CDBG funding must be held by individuals who, at the time of hire, meet the low- to moderate- income guidelines for the county location.

Infrastructure funding requires that half of the funding be paid back over a 10-year period at a rate of 2 percent.  Financing for working capital, equipment and real property carries a fixed rate equal to four percent or three percent below prime, whichever is greater, set on the award date.  The term of the loan depends on the type of assets being financed: working capital up to five years, equipment up to 10 years and real property up to 15 years.

Partnership Fund
The Department provides low-interest state funds to cities and counties for infrastructure improvements that support Kansas basic enterprises such as manufacturing and distribution.  Eligible projects may include construction, rehabilitation or expansion of public facilities, including roads, streets, highways, water supply and treatment facilities, water distribution lines, wastewater collection lines and related improvements.

Kansas Bioscience Authority (KBA)
Commerce works in partnership with the Kansas Bioscience Authority to assist in the expansion and recruitment of bioscience companies.  The KBA has direct financing programs and other resources that can be used to recruit new bioscience companies and world-class scholars, fund equipment and lab space for reserach and facilitate the commercialization of bioscience discoveries.

Workforce Development Programs
The Department of Commerce has two workforce training programs to offset a company's training costs.  Companies creating new jobs may qualify for Kansas Industrial Training (KIT) assistance.  Eligibility of the program depends on the number jobs created and the corresponding wages.  We also have the Kansas Industrial Retraining (KIR) program to retrain a Kansas company's existing workforce on new technology or production activities.  Projects involving a Kansas Basic Industry - which includes manufacturing, distribution or regional/national service facilities - may qualify for these programs.

Both of these programs offer direct financial assistance to pay a negotiated portion of the costs to train a company's employees. Companies may apply the assistance toward items such as instructors' salaries; meals, travel and lodging (including out-of-state or international travel); video development; textbooks and training manuals; supplies and materials; temprorary training facilities and curriculum planning and development.

High Performance Incentive Program (HPIP)
This program provides a 10 percent corporate income tax credit on the qualified capital investment of an eligible company.  Qualified capital investment can include such items as the purchase or lease of a facility or equipment, remodeling or build-out costs, fixtures, furniture and computers.  Equipment transferred to Kansas from out-of-state is also credited at the original acquisition cost.  The 10 percent tax credit is awarded to companies that operate an eligible business, pay above-average wages and invest in employee training.  The credits can be used to significantly reduce a company's corporate income tax liability in a given year.  Credits must be used within a consecutive 16-year period.  The minimum investment threshold to qualify to HPIP is $1 million for the urban counties of Douglas, Johnson, Sedgwick, Shawnee and Wyandotte.  For all other counies, the minmum investment threshold is $50,000.

A key component of HPIP is the completion of the Project Description form, which must be submitted to the Department of Commerce prior to the company signing any document, such as a lease or purchase agreement, which commits the company to locating or expanding in Kansas.

Machinery and Equipment Property Tax Exemption
Commercial and industrial machinery and equipment acquired by qualified purchase or lease or transferred into the state is exempt from state and local property tax.  The exemption pertains to machinery and equipment used in the expansion of an existing facility or the establishment of a new facility.  The exemption covers machinery and equipment used in manufacturing or warehousing/distribution, commerical equipment, computers, desks and chairs, copiers and fax machines.

Property Tax Abatement
Cities or counties may exempt real property from ad valorem taxation.  The tax abatement can include all or any portion of the appraised buildings, land and improvements.  A total or partial tax abatement may be in effect for up to 10 years after the calendar year in which the business commences its operations.  Any property tax abatement is the decision of the city or county.

Sales Tax Exemptions

Other Tax Incentives and Business Incentives
Right-to-Work State - Union membership is well below the national average.

Inventory Tax Exemption- All merchant and manufacturers' inventores are exempt from property taxes.

Research Tax Credit - Kansas offers an income tax credit equal to 6.5 percent of a company's investment in research and development above an average expenditure of the previous three-year period.  Twenty-five percent of the allowable annual credit may be claimed in any one year.

No Local Income Taxes - Kansas cities and counties do not impose income or earnings taxes on personal or corporate income.

No Kansas Franchise Tax - Kansas phased out its franchise tax in 2011.

Workers' Compensation - The Kansas workers'compensation program has undergone major changes of the past few years which has resulted in our premium rates being racked 9th lowest in the U.S.

Local Incentives 

Property Tax Exemption
Cities and Counties may exempt real property from ad valorem taxation.  A total or partial tax abatement may be in effect for up to 10 years after the calendar year in which the business commences its operations.
  

Neighborhood Revitalization
This program provides for a 95% rebate of property tax paid on the difference in taxes assessed on the property prior to the start of a project and taxes assessed on the property upon completion of the project.  This is available for 5 years and is subject to complying with the terms of the program.  This is available not only for businesses but for residential also.

These apply to new construction on a private lot. Upon completion of construction:

1st Time Home Buyers:
These pply to first-time home buyers for an existing home

2011 Commercial Incentives:
These apply to all new commercial construction in the City of Caldwell.  The be given to any business that is newly established within the city limits of Caldwell.  Pyramid businesses (such as Amway do not qualify).  Home-based businesses do not qualify.  The incentive is given to any entrepreneur willing to take a risk at starting a new business.  Upon completion of construction:

For City of Wellington Incentives, please visit their website.
 

Other Local Incentives
Some of our other Cities have additional incentives specific to their locations.  The Sumner County Economic Development Commission will work with the Cities to determine what additional incentives may apply to your company.