A Variety of state, city and county incentives are available to expanding companies
State of Kansas Incentives
PEAK (Promoting Employment Across Kansas)
This program PEAK is intended to encourage economic development in Kansas by incenting companies to relocate, locate or expand business operations and jobs in Kansas. During the benefit period, participating PEAK companies may retain 95% of the state payroll withholding tax of PEAK-Eligible employees/jobs that pay at or above the county median wage where the operations and jobs will be located. Depending on the number of PEAK jobs/employees to be hired in Kansas and their wage levels, the Secretary can approve benefit periods of up to 10 years. PEAK requires the qualified company to commit to creating ten (10) new jobs in metropolitan counties over a two-year period. The qualified company must also pay wages to the PEAK jobs/employees, that when aggregated, meet or exceed the county median wage for their industry. Qualified applicants include for-profit companies in eligible NAICS codes. Such companies must make available to full-time employees adequate health insurance coverage and pay at least 50% of the premium.
High Performance Incentive Program
Companies may be eligible for a Kansas Income Tax Credit equal to 10% of eligible capital investment that exceeds $50,000. This credit has a 10-year carry-forward provision and may offset 100% of a firm's annual tax obligation. There is also a sales tax exemption similar in scope to the Enterprise Zone sales tax exemption. The company must:
- Pay above average wages for the industry.
- Invest at least 2% of payroll in training or participate in one of the state's workforce training programs.
- Otherwise eligible non-manufacturing worksites must also show that more than half of worksite revenues are from sales to specific kinds of customers, or else the worksite must be a headquarters or a back-office/support worksite of a national or multi-national corporation.
- Fall into major NAICS category 221, 311-425, 481-721, or 811-928 (generally excluded from eligibility are retailers and businesses involved in agriculture, construction and mining, unless the worksite is a headquarters or back-office of a national or multi-national corporation.)
KIT (Kansas Industrial Training)
This program provides training assistance in job creation. Training can include pre-employment, classroom and on-the-job training by in-house instructors or vendors. Trainees may receive instruction on the company's own production equipment, on the plant floor, or on similar machinery in a classroom setting. Eligible expenditures include instructor salaries, curriculum planning and development, materials, supplies, textbooks and minor training equipment. Terms are negotiable and cover up to 100% of training costs.
KIR (Kansas Industrial Retraining)
This program provides training assistance to companies in industries that are restructuring due to changing technology and to companies diversifying production activities. Terms are negotiable and cover up to 50% of
City of Wichita / Sedgwick County Incentives
IRBs (Industrial Revenue Bonds)
The City of Wichita and/or Sedgwick County may exempt property financed with IRBs from property taxes for a period of up to ten years. Building materials and equipment permanently installed will be exempt from state and local sales taxes, subject to local governing body approval.
Abatement of Property for Economic Development Purposes
Wichita and Sedgwick County may abate ad valorem taxes on all or any portion of the appraised value of all buildings or added improvements used exclusively by a business for:
- Manufacturing articles of commerce;
- Conducting research and development; or
- Storing goods or commodities which are sold or traded in interstate commerce.
Additions to or expansions of existing buidlings qualify for the property tax exemptions if, as a result of the expansion, new jobs are created. Total or partial ad valorem tax may be in effect for up to 10 years after the calendar year in which a business commences its operations or an expansion is completed. There is no personal property tax on machinery and equipment purchased after June 30, 2006.
EDX (Kansas Constitutional Amendment)
The Wichita City Council and the Board of Sedgwick County Commissioners may exempt property from taxation for a period of up to ten years. This may include all or any portion of both real and/or tangible personal property used exclusively in:
- Manufacturing articles of commerce
- Conducting research and development
- Storing goods or commodities which are sold or traded in interstate commerce
- See PDF application in download section
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) is section 168 of the internal Revenue Code, or canned software as defined in section 197 of the Internal Revenue Code. business machinery and equipment newly purchased, leased or moved into Kansas is exempt from property tax. Examples of eligible equipment include manufacturing equipment, office furniture, computers, software and racking.
Business Machinery & Equipment Property Tax Exemption
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.
Business Inventory Property Tax Exemption
Effective January 1, 1989, merchant and manufacturer business inventories (raw materials, goods-in-process and finished goods) are exempt from property tax by Kansas constitutional amendment.
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 exemptions can be provided for IRB-financied purchases subject to local governing body approval. Click here for more information and to dowload project and utility sales tax exemption application forms.
Foreign Trade Zone
The Sedgwick County Foreign Trade Zone is a general-purpose zone where foreign and domestic goods are not within U.S. Customs territory. Users are thereby exempt from paying duty or federal excise tax while goods remain in the zone or are exported. If final product is imported into the United States, import tax or duty is due only at the time of transfer. Additional information
Trade Show Assistance Program
Assistance is available for up to one-half of a company's direct foreign exhibition-related expenses (not to exceed $3,500 per show and $7,000 annually). Reimbursable expenses might include booth space, utility costs, transportation of equipment or materials, booth assembly/disassembly, interpreter fees at the show, translation fees for materials, etc. Additional information
Income Tax Credit for Research & Development
A company can qualify for an income tax credit for research and development if: Research and development occurred within the state of Kansas; Expenditures increased above the company’s average expenditures for such activities during the prior two years. Tax credit is equal to 6.5% of the increased expenditure amount and is deductible over a 4-year period (25% annually.)