Business Incentives

So come take a look at Kansas. We think you’ll like what you see.

SITE LOCATION ASSISTANCE

The Business Recruitment Team for the Kansas Department of Commerce can assist you with various site location needs. Whether you're seeking buildings or sites, our team has the resources and information to help you make an informed decision. To preview available sites and properties as well as incentive programs in Kansas, visit our Recruitment Website at ThinkBigKS.com.

CUSTOMIZED INCENTIVE PROPOSALS

Our Business Recruitment Team creates customized incentive proposals for clients based on capital investment, job creation, employee salaries and each company's unique needs. We also coordinate with community economic development professionals for local incentives such as discounted building and land purchases, reduced property taxes, build-to-suit agreements and finance packages. All types of assistance offered for new company locations are also available for subsequent expansions.

FINANCE PROGRAMS

New! 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. Companies need to create at least 10 new jobs within two years in metropolitan areas or five new jobs within two years 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 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 withholding 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.

Kansas Economic Opportunity Initiatives Fund – The Department of Commerce can provide a zero-percent interest forgivable loan to qualified companies. This loan can offset costs associated with the establishment of a new facility or the expansion of an existing facility. Eligible costs include site improvements, construction, build-out and purchases and relocation of machinery and equipment. The loan is forgiven in 20 percent annual increments over a five-year period based on meeting the job and payroll targets. Approval of funding for this program is based on the number of new jobs created, the level of wages paid to the new employees and the economic impact of the project.

Industrial Revenue Bonds – 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 – Eligible small city and county governments may apply for Community Development Block Grant economic development funds to make water, sewer, rail spur, roadway or other 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 equipment 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 two 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 – 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 research and facilitate the commercialization of bioscience discoveries.

WORKFORCE DEVELOPMENT PROGRAMS

The Department of Commerce has three workforce training programs to offset a company’s training costs. Companies creating new jobs may qualify for Investments in Major Projects and Comprehensive Training (IMPACT) or Kansas Industrial Training (KIT) assistance. Eligibility for either program depends on the number of 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.

All 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; temporary training facilities; curriculum planning and development and in certain situations reimbursement of trainee’s wages for up to six months.

INCOME TAX INCENTIVES

Enterprise Zone Program

This program offers corporate income tax credits for net, new job creation and qualified capital investment in Kansas. Eligibility for this program depends on the type of business and the number of jobs created. Manufacturers need to create at least two net, new jobs, non-manufacturers five net, new jobs and ancillary support and headquarters at least 20 net, new jobs.

The Enterprise Zone job creation and investment tax credits are available throughout Kansas except for the metropolitan counties of: Johnson, Wyandotte, Douglas, Shawnee, Sedgwick and Leavenworth. All other areas of Kansas are considered in an Enterprise Zone and can offer the benefits of this program to eligible companies. The benefits include corporate income tax credits of $1,500 per net, new job created and a one percent tax credit on qualified net, new capital investment. Designated non-metropolitan counties in Kansas can offer an enhanced tax credit of $2,500 per net, new job created. The credits can be used to significantly reduce a firm’s corporate income tax liability in a given year, and unused credits may be carried forward to future tax years.

High Performance Incentive Program
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 ten 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 10 year period.

A key component of the High Performance Incentive Program 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.

PROPERTY TAX INCENTIVES

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, commercial 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 Sales Tax Exemptions include:

Labor related to original construction
New machinery and equipment for manufacturing and distribution. This also includes pre- and post-production machinery and equipment, including raw material handling, waste storage, water purification and oil cleaning, as well as ancillary property such as gas pipes, electrical wiring and pollution control equipment
Tangible personal property that becomes an ingredient or component part of a finished product
Tangible personal property that is immediately consumed in the production process, including electric power, natural gas and water
Incoming and outgoing interstate telephone or transmission services (WATTS)
Real and personal property financed with an Industrial Revenue Bond (IRB)

OTHER TAX INCENTIVES AND BUSINESS INITIATIVES

Right-to-Work State – Union membership is well below the national average.
Inventory Tax Exemption – All merchant and manufacturers’ inventories 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 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.
Phase Out of Kansas Franchise Tax – Kansas is phasing out its franchise tax and it will be repealed altogether by tax year 2011.
Workers’ Compensation – The Kansas workers’ compensation program has undergone major changes over the past few years which has resulted in our premium rates being ranked 10th lowest in the U.S.
Renewable Energy – Kansas has a variety of incentive programs available for renewable energy, including the wind and solar bond financing program as well as income tax credits for biodiesel, ethanol, cellulosic alcohol, and biomass-to-energy facilities and other renewable energy operations.
Reduction in Corporate Income Tax Rate – Kansas will reduce its corporate income tax rate to seven percent by 2011.