Kansas is a pro-business, low tax state
Kansas Corporate Income Tax
4.00% of Kansas taxable net income plus 3.00% surtax (2011) on taxable net income in excess of $50,000 (marginal rate 7.00%.) Only the proportion of net income generated within the state is subject to Kansas income tax. A three-factor formula relating sales, payroll and property to the Kansas facility is generally used to determine Kansas taxable net income. With prior approval, a two-factor formula (sales and property) may be elected if the payroll factor exceeds 200% of the average of the sales factor and property factor values in the state. Such an election is binding for 10 years.
Rates apply to the first $14,000 of each employee’s annual wages. The year 2018 new employer rate is 6.00% for the construction sector and 2.70% for all other sectors. Employers qualify for experience rating after 3 to 4 years of operation. The 2018 experience rate range for positive balance employers is 0.20% to 5.40% based entirely on experience rating. Year 2018 experience rates for negative balance employers range from 5.60% to 7.60%.
Kansas manufacturing work comp rates are about 23% below the national average. Worker's compensation premiums are determined by applying the rate for a specific occupation, per $100 of payroll, to the annual wage per employee. Businesses can obtain worker's compensation insurance from private insurance companies or, upon application, become self-insured. A worker’s compensation pool, the Kansas Employers Workers Compensation Fund, is available for qualified companies. For more information and specific occupation rates contact Patricia Songer, Midland Management toll-free at (888) 799-5712.
Sales Tax Exemption
Prior application for a Project Exemption Certificate can be made under the High Performance Incentive Program (HPIP.) If approved, this permits 100% sales tax exemption on items used to construct, build-out, remodel, furnish and equip the worksite. Such exemption covers all eligible taxable purchases of capital investment made by the entity submitting the application. Alternatively – if IRBs are utilized – sales tax exemption can be provided for IRB-financed purchases subject to local governing body approval. Click here for more information and to download project and utility sales tax exemption application forms.
Telecommunications Sales Tax
Both local telephone calls and long distance calls (intrastate and interstate) are subject to 6.3% State sales tax and 1.0% Sedgwick County sales tax. Non-WATS* "800" number calls (both intrastate and interstate) are taxed in exactly the same fashion as numbers with other prefixes. There are no State of Kansas, Sedgwick County or City of Wichita taxes specific to "800" numbers. The only difference is that “800” prefix numbers incur no charge to the caller. Interstate WATS telephone service (including WATS-based "800" service), dedicated lines and computer access service (data lines) are exempt from sales tax. WATS lines are declining technology. The majority of "800" service is not provided via (inward) WATS lines, and is therefore subject to sales tax.
* WATS -- Wide Area Telephone Service Long distance service provided by various carriers that includes both intrastate and interstate service for outgoing and incoming (800) calls. WATS provides a bulk savings plan for companies with a high volume of toll calls, such as telemarketing. WATS charges include a flat rate for each hour of calling time, with cost per hour decreasing as toll usage increases.
Corporate Franchise Tax
This annual tax on corporations in Kansas was repealed in tax (calendar) year 2011. There is no longer a Kansas corporate franchise tax.
Motor Fuels Tax
Moter Fuels Tax
$0.24 per gallon
$0.26 per gallon
Liquefied Petroleum Gas
$0.23 per gallon
Kansas Personal Income Tax -- Standard Deductions
Married filing jointly
Married filing separately
Single Head of Household
Kansas allows personal exemptions of $2,250 for each personal exemption allowed under federal income tax laws. An additional exemption is allowed in Kansas if you file as head of household on a federal return.
Note: there is no local (county or city) personal income tax. Both resident and non-resident aliens incur federal and state income tax under the same terms as U.S. citizens (Canadians may take credit on their Canadian tax return.)
Effective Tax Year 2017 – Kansas Personal Income Tax becomes three bracket system:
Kansas Adjusted Gross Income (Married Joint): $0 to $30,000 @ 2.9%; $30,001 to $60,000 @ 4.9%; over $60,000 @ 5.2%.
Kansas Adjusted Gross Income (All Other): $0 to $15,000 @ 2.9%; $15,001 to $30,000 @ 4.9%; over $30,000 @ 5.2%.
Effective July 1, 2006: Business machinery and equipment newly purchased, leased or moved into Kansas is exempt from property tax. This is of particular benefit to capital-intensive manufacturing operations. The exemption applies equally to manufacturing equipment and office business equipment, furniture and fixtures. Items of business personal property under $1,500 original purchase price are also exempt from property tax regardless of date of purchase.
Effective January 1, 1989: Business inventories (raw materials, goods-in-process and finished goods) are exempt from property tax.
Tangible Personal Property
Commercial-Industrial Machinery & Equipment
Ad valorem tax mill levies for City of Wichita
Tax District 6702 - Covers most of Wichita
Dollars per $1,000 of assessed value
|USD 259 Bonds||8.055|
|Total (most areas-2017)||117.293|
Assuming house with an appraised value of $150,000
Multiplied by residential assessment rate of 11.5%
Assessed Value (tax base)
Divide by $1,000 = 17.25
Then multiply 17.25 by the mill levy:
17.25 x 117.293 = $2,023.30
Which is the annual property tax
Business Example: Property tax on $100,000 (appraised value) of commercial real property.
Business machinery & equipment acquired after June 30, 2006 is exempt from property tax.
Assessment percentage of commercial-industrial real estate = 25%.
Total mill levy in most areas of Wichita = 117.293 mills (dollars per $1,000 assessed value).
$100,000 x 25% = $25,000 assessed value (tax base). Divide by $1,000 = 25. Then multiply 25 by mill levy (117.293) to arrive at the annual property tax = $2,932.33. Equivalent to 2.932% of appraised market value or $29.32 per $1,000 of appraised value.
Mill levies vary by location – For levies at specific locations contact the Sedgwick County Clerk’s Office – Sedgwick County Clerk