As Amended by House Committee
Session of 2026
HOUSE BILL No. 2757
By Committee on Commerce, Labor and Economic Development
Requested by Eric Stafford on behalf of the Kansas Chamber of Commerce
2-6
1AN ACT concerning taxation; relating to income tax credit incentives;
2repealing or discontinuing certain income tax credit incentives; relating
3to abandoned well plugging credit, agritourism liability insurance
4credit, alternative fuel tax credit, assistive technology contribution
5credit, biomass-to-energy plant tax credit and deduction, carbon
6dioxide capture and sequestration tax deduction, disabled access credit,
7electric cogeneration facility credit and deduction, employer health
8insurance contribution credit, environmental compliance credit, friends
9of cedar crest association credit, petroleum refinery credit, regional
10foundation credit, storage and blending equipment credit and deduction
11and swine facility improvement credit; extending the income tax credit
12for angel investors and aviation-related employment; providing
13expanded options in the high performance tax credit program for tax
14credit transfers and wage requirements for rural businesses; amending
15K.S.A. 40-2246, 65-7107, 74-50,131, 74-50,154, 79-229, 79-32,177,
1679-32,179, 79-32,180, 79-32,201, 79-32,204, 79-32,207, 79-32,222 and
1779-32,256 and K.S.A. 2025 Supp. 32-1438, 74-8133, and 79-32,160a
18and 79-32,176a and repealing the existing sections; also repealing
19K.S.A. 79-32,218, 79-32,233, 79-32,234, 79-32,235, 79-32,236, 79-
2032,237, 79-32,245, 79-32,246, 79-32,247, 79-32,248, 79-32,249, 79-
2132,251, 79-32,252, 79-32,253, 79-32,254 and 79-32,255 and K.S.A.
222025 Supp. 79-32,275 and 79-32,295.
23
24Be it enacted by the Legislature of the State of Kansas:
25Section 1. K.S.A. 2025 Supp. 32-1438 is hereby amended to read as
26follows: 32-1438. (a) For taxable years commencing on and after
27December 31, 2003, December 31, 2004, December 31, 2005, December
2831, 2006, and December 31, 2007, and ending before January 1, 2026,
29there shall be allowed as a credit against the tax liability of a taxpayer
30imposed under the Kansas income tax act, an amount equal to 20% of the
31cost of liability insurance paid by a registered agritourism operator who
32operates an agritourism activity on the effective date of this act. No tax
33credit claimed pursuant to this subsection shall exceed $2,000. If the
34amount of such tax credit exceeds the taxpayer's income tax liability for
35such taxable year, the amount thereof that exceeds such tax liability may
1be carried over for deduction from the taxpayer's income tax liability in the
2next succeeding taxable year or years until the total amount of tax credit
3has been deducted from tax liability, except that no such tax credit shall be
4carried forward for deduction after the third taxable year succeeding the
5taxable year in which the tax credit is claimed.
6(b) For the first five taxable years commencing after a taxpayer opens
7such taxpayer's business, after the effective date of this act, and before the
8taxable year beginning January 1, 2026, there shall be allowed as a credit
9against the tax liability of a taxpayer imposed under the Kansas income tax
10act, an amount equal to 20% of the cost of liability insurance paid by a
11registered agritourism operator who starts an agritourism activity after the
12effective date of this act. No tax credit claimed pursuant to this subsection
13shall exceed $2,000. If the amount of such tax credit exceeds the
14taxpayer's income tax liability for such taxable year, the amount thereof
15that exceeds such tax liability may be carried over for deduction from the
16taxpayer's income tax liability in the next succeeding taxable year or years
17until the total amount of tax credit has been deducted from tax liability,
18except that no such tax credit shall be carried forward for deduction after
19the third taxable year succeeding the taxable year in which the tax credit is
20claimed.
21(c) The secretary of commerce shall adopt rules and regulations
22establishing criteria for determining those costs which qualify as costs of
23liability insurance for agritourism activities of a registered agritourism
24operator.
25(d) As used in this section, terms mean the same as provided by
26K.S.A. 32-1432, and amendments thereto.
27(e) For tax year 2013 and all tax years thereafter through tax year
282025, the income tax credit provided by this section shall only be available
29to taxpayers subject to the income tax on corporations imposed pursuant to
30of K.S.A. 79-32,110(c), and amendments thereto, and shall be applied only
31against such taxpayer's corporate income tax liability. No new income tax
32credit provided by this section shall be awarded to any taxpayer for any
33tax year after tax year 2025.
34Sec. 2. K.S.A. 40-2246 is hereby amended to read as follows: 40-
352246. (a) A credit against the taxes otherwise due under the Kansas income
36tax act shall be allowed to an employer for amounts paid during the
37taxable year for purposes of this act on behalf of an eligible employee as
38defined in K.S.A. 40-2239, and amendments thereto, to provide health
39insurance or care and amounts contributed to health savings accounts of
40eligible covered employees, except that for taxable years commencing
41after December 31, 2013, no credit shall be allowed pursuant to this
42section for that portion of any amounts paid by an employer for healthcare
43expenditures, a health benefit plan, as defined in K.S.A. 65-6731, and
1amendments thereto, or amounts contributed to health savings accounts for
2the purchase of an optional rider for coverage of abortion in accordance
3with K.S.A. 40-2,190, and amendments thereto.
4(b) (1) For employers that have established a small employer health
5benefit plan after December 31, 1999, but prior to January 1, 2005, the
6amount of the credit allowed by subsection (a) shall be $35 per month per
7eligible covered employee or 50% of the total amount paid by the
8employer during the taxable year, whichever is less, for the first two years
9of participation. In the third year, the credit shall be equal to 75% of the
10lesser of $35 per month per employee or 50% of the total amount paid by
11the employer during the taxable year. In the fourth year, the credit shall be
12equal to 50% of the lesser of $35 per month per employee or 50% of the
13total amount paid by the employer during the taxable year. In the fifth year,
14the credit shall be equal to 25% of the lesser of $35 per month per
15employee or 50% of the total amount paid by the employer during the
16taxable year. For the sixth and subsequent years, no credit shall be
17allowed.
18(2) For employers that have established a small employer health
19benefit plan or made contributions to a health savings account of an
20eligible covered employee after December 31, 2004, the amount of credit
21allowed by subsection (a) shall be $70 per month per eligible covered
22employee for the first 12 months of participation, $50 per month per
23eligible covered employee for the next 12 months of participation and $35
24per eligible covered employee for the next 12 months of participation.
25After 36 months of participation, no credit shall be allowed.
26(c) If the credit allowed by this section is claimed, the amount of any
27deduction allowable under the Kansas income tax act for expenses
28described in this section shall be reduced by the dollar amount of the
29credit. The election to claim the credit shall be made at the time of filing
30the tax return in accordance with law. If the credit allowed by this section
31exceeds the taxes imposed under the Kansas income tax act for the taxable
32year, that portion of the credit which exceeds those taxes shall be refunded
33to the taxpayer.
34(d) Any amount of expenses paid by an employer under this act shall
35not be included as income to the employee for purposes of the Kansas
36income tax act. If such expenses have been included in federal taxable
37income of the employee, the amount included shall be subtracted in
38arriving at state taxable income under the Kansas income tax act.
39(e) The secretary of revenue shall promulgate rules and regulations to
40carry out the provisions of this section.
41(f) This section shall apply to all taxable years commencing after
42December 31, 1999, and ending before January 1, 2026.
43(g) For tax year 2013 and all tax years thereafter through tax year
12025, the income tax credit provided by this section shall only be available
2to taxpayers subject to the income tax on corporations imposed pursuant to
3subsection (c) of K.S.A. 79-32,110, and amendments thereto, and shall be
4applied only against such taxpayer's corporate income tax liability. No new
5tax credit provided by this section shall be awarded to any taxpayer for
6any tax year after tax year 2025.
7Sec. 3. K.S.A. 65-7107 is hereby amended to read as follows: 65-
87107. (a) Appropriate state agencies are hereby directed to amend their
9state plans to protect the benefits of those receiving such benefits by
10adding language consistent with the following: Any funds in an individual
11development account, including accrued interest, shall be disregarded
12when determining eligibility to receive the amount of any public assistance
13or benefits.
14(b) A program contributor shall be allowed a credit against state
15income tax imposed under the Kansas income tax act in an amount equal
16to 25% of the contribution amount.
17(c) The institute shall verify all tax credit claims by contributors. The
18administration of the community-based organization, with the cooperation
19of the participating financial institutions, shall submit the names of
20contributors and the total amount each contributor contributes to the
21individual development account reserve fund for the calendar year. The
22institute shall determine the date by which such information shall be
23submitted to the institute by the local administrator. The institute shall
24submit verification of qualified tax credits pursuant to K.S.A. 65-7101
25through 65-7107, and amendments thereto, to the department of revenue.
26(d) The total tax credits authorized pursuant to this section shall not
27exceed $6,250 in any fiscal year.
28(e) The provisions of this section shall be applicable to all taxable
29years commencing after December 31, 2002, and ending before January 1,
302026.
31(f) For tax year 2013 and all tax years thereafter through tax year
322025, the income tax credit provided by this section shall only be available
33to taxpayers subject to the income tax on corporations imposed pursuant to
34subsection (c) of K.S.A. 79-32,110, and amendments thereto, and shall be
35applied only against such taxpayer's corporate income tax liability. No new
36tax credit provided by this section shall be awarded to any taxpayer for
37any tax year after tax year 2025.
38Sec. 4. K.S.A. 74-50,131 is hereby amended to read as follows: 74-
3950,131. Commencing after December 31, 1999: (a) As used in this act:
40"Qualified firm" means a for-profit business establishment, subject to state
41income, sales or property taxes, identified under the North American
42industry classification system (NAICS) subsectors 221, 311 to 339, 423 to
43425, 481 to 519, 521 to 721 and 811 to 928 or is identified as a corporate
1or regional headquarters or back-office operation of a national or multi-
2national corporation regardless of NAICS designation. The secretary of
3commerce shall determine eligibility when a difference exists between a
4firm's primary business activity and NAICS designation. A business
5establishment may be assigned a NAICS designation according to the
6primary business activity at a single physical location in the state.
7(b) In the case of firms in NAICS subsectors 221, 423 to 425, 481 to
8519, 521 to 721 and 811 to 928, the business establishment must also
9demonstrate the following:
10(1) More than 1/2 of its gross revenues are a result of sales to
11commercial or governmental customers outside the state of Kansas; or
12(2) more than 1/2 of its gross revenues are a result of sales to Kansas
13manufacturing firms within NAICS subsectors 311 to 339; or
14(3) more than 1/2 of its gross revenues are a result of a combination of
15sales described in (1) and (2).
16(c) For purposes of determining whether one of the average wage
17options described in subsection (d) below is satisfied, business
18establishments located within a metropolitan county, as defined in K.S.A.
1974-50,114, and amendments thereto, will be compared only to other
20businesses within that metropolitan county, and business establishments
21located outside of a metropolitan county will be compared to businesses
22within an aggregation of counties representing the business establishment's
23region of the state, which regional aggregation will exclude metropolitan
24counties. Such aggregation shall be determined by the department of
25commerce.
26(d) Additionally, a business establishment having met the criteria as
27established in subsection (a) or (b), and using the comparison method
28described in subsection (c), must meet one of the following criteria:
29(1) The establishment with 500 or fewer full-time equivalent
30employees will provide an average wage that is above the average wage
31paid by all firms with 500 or fewer full-time equivalent employees which
32share the appropriate NAICS designation.
33(2) The establishment with 500 or fewer full-time equivalent
34employees is the sole firm within its appropriate NAICS designation
35which has 500 or fewer full-time equivalent employees.
36(3) The establishment with more than 500 full-time equivalent
37employees will provide an average wage that is above the average wage
38paid by firms with more than 500 full-time equivalent employees which
39share the appropriate NAICS designation.
40(4) The establishment with more than 500 full-time equivalent
41employees is the sole firm within its appropriate NAICS designation
42which has more than 500 full-time equivalent employees, in which event it
43shall either provide an average wage that is above the average wage paid
1by all firms with 500 or fewer full-time equivalent employees which share
2the appropriate NAICS designation, or be the sole firm within its
3appropriate NAICS designation.
4(e) As an alternative to the requirements of subsections (c) and (d), a
5firm having met the requirements of subsections (a) or (b), may qualify, if
6excluding taxable disbursements to company owners, the business
7establishment's annual average wage must be greater than or equal to:
8(1) Prior to January 1, 2026, 1.5 times the aggregate average wage
9paid by industries covered by the employment security law based on data
10maintained by the secretary of labor and beginning on January 1, 2026,
11125% of such aggregate wage; or
12(2) beginning on January 1, 2026, for a firm that is located outside of
13a metropolitan county, 125% of the aggregate average wage for all
14counties that are not metropolitan counties as determined by the secretary
15of labor based on data maintained by the secretary of labor. Such average
16wage for all nonmetropolitan counties shall be published on the website of
17the department of labor and updated at least annually.
18(f) For the purposes of this section, the number of full-time
19equivalent employees shall be determined by dividing the number of hours
20worked by part-time employees during the pertinent measurement interval
21by an amount equal to the corresponding multiple of a 40-hour work week
22and adding the quotient to the number of full-time employees.
23(g) (1) Except as provided by paragraph (2), the secretary of
24commerce shall certify annually to the secretary of revenue that a firm
25meets the criteria for a qualified firm and that the firm is eligible for the
26benefits and assistance provided under this act.
27(2) If the secretary of commerce has certified a firm as meeting such
28requirements in the year that the firm earns the tax credit pursuant to
29K.S.A. 79-32,160a, and amendments thereto, such firm shall be deemed to
30be certified for purposes of such credit in each taxable year thereafter
31during the tax credit carryforward period if the secretary of commerce
32determines that such firm continues to meet the average wage requirement
33applicable to such firm pursuant to subsection (d) or (e).
34(3) The secretary of commerce is hereby authorized to obtain any and
35all information necessary to determine such eligibility. Information
36obtained under this section shall not be subject to disclosure pursuant to
37K.S.A. 45-215 et seq., and amendments thereto, but shall upon request be
38made available to the legislative post audit division.
39(h) The secretary of commerce shall publish rules and regulations for
40the implementation of this act. Such rules and regulations shall include,
41but not be limited to:
42(1) A definition of "training and education" for purposes of K.S.A.
4374-50,132, and amendments thereto.
1(2) Establishment of eligibility requirements and application
2procedures for expenditures from the high performance incentive fund
3created in K.S.A. 74-50,133, and amendments thereto.
4(3) Establishment of approval guidelines for private consultants
5authorized pursuant to K.S.A. 74-50,133, and amendments thereto.
6(4) Establishment of guidelines for prioritizing business assistance
7programs pursuant to K.S.A. 74-50,133, and amendments thereto.
8(5) A definition of "commercial customer" for the purpose of K.S.A.
974-50,133, and amendments thereto.
10(6) A definition of "headquarters" for the purpose of K.S.A. 74-
1150,133, and amendments thereto.
12(7) Establishment of guidelines concerning the use and disclosure of
13any information obtained to determine the eligibility of a firm for the
14assistance and benefits provided for by this act.
15Sec. 5. K.S.A. 74-50,154 is hereby amended to read as follows: 74-
1650,154. (a) As used in this act: (1) "Business support services" means
17business counseling, technical assistance and business planning services
18provided to existing or prospective small businesses or entrepreneurs;
19(2) "contributions" means and includes the donation of cash or
20property other than used clothing in an amount or value of $250 or more.
21Contributions shall be valued as follows:
22(A) Stocks and bonds contributed shall be valued at the stock market
23price on the date of transfer;
24(B) personal property items contributed shall be valued at the lesser
25of the item's fair market value or cost to the donor and may be inclusive of
26costs incurred in making the contribution. Such value shall not include
27sales tax;
28(C) contributions of real estate are allowable for credit only when title
29of such real estate is in fee simple absolute and is clear of any
30encumbrances; and
31(D) the amount of credit allowable shall be based upon the lesser of
32two current independent appraisals conducted by state licensed appraisers;
33(3) "department" means the department of commerce;
34(4) "entrepreneur" means an individual creating a new business,
35service or product;
36(5) "region" means multi-county areas as defined by the secretary of
37commerce;
38(6) "regional business development fund" means an authorized and
39audited fund that is created by taxpayer contributions, interest income and
40investment income and is managed by the regional foundation board of
41directors for the purposes of economic and leadership development in the
42region;
43(7) "regional foundation" means any organization in Kansas that
1demonstrates capacity to provide economic development services to
2regions as defined by this act, and: (A) Has obtained a ruling from the
3internal revenue service of the United States department of treasury that
4such organization is exempt from income taxation under the provisions of
5section 501(c)(3) or 501(c)(6) of the federal internal revenue code;
6(B) has been designated as a certified development company by the
7United States small business administration;
8(C) has been designated as an economic development district by the
9United States department of commerce's economic development
10administration;
11(D) has been organized as a regional planning commission under
12K.S.A. 12-744 et seq., and amendments thereto, or its predecessor, K.S.A.
1312-716 et seq., and amendments thereto; or
14(E) is incorporated in the state of Kansas as a nonstock, nonprofit
15corporation;
16(8) "regional leadership development" means training and education
17that enable a region to develop community leadership that strengthens the
18economic and social environment in that region;
19(9) "rural community" means any city having a population of fewer
20than 50,000 or except as otherwise provided, any unincorporated area.
21Unincorporated areas within any county having a population of more than
22100,000 are not eligible;
23(10) "secretary" means the secretary of the department of commerce;
24(11) "small business" means an independently owned and operated
25business having fewer than 100 full-time equivalent employees;
26(12) "taxpayer" means: (A) Any business entity authorized to do
27business in the state of Kansas which is subject to the state income tax
28imposed by the provisions of the Kansas income tax act;
29(B) any individual subject to the state income tax imposed by the
30provisions of the Kansas income tax act;
31(C) any national banking association, state bank, trust company or
32savings and loan association paying an annual tax on its net income
33pursuant to article 11 of chapter 79 of the Kansas Statutes Annotated; or
34(D) any insurance company paying the premium tax and privilege
35fees imposed pursuant to K.S.A. 40-252, and amendments thereto; and
36(13) "technology improvements" means a project that results in the
37ability of the region to enhance service in areas, including broadband
38access, web site creation, wireless internet services, computer
39programming, computer servers, computer networks, computer databases,
40electronic training modules, electronic media and any other technological
41areas deemed eligible by the secretary.
42(b) For taxable years commencing after December 31, 2004, and
43ending before January 1, 2026, any taxpayer contributing to a regional
1foundation designated by the secretary of commerce, shall be allowed a
2credit, as provided in this act, against the tax imposed by the Kansas
3income tax act, the tax on net income of national banking associations,
4state banks, trust companies or savings and loan associations imposed
5under article 11 of chapter 79 of the Kansas Statutes Annotated, or the
6premium tax or privilege fees imposed pursuant to K.S.A. 40-252, and
7amendments thereto, if the proposal of the regional foundation is approved
8pursuant to this act.
9(c) (1) On December 31, 2007, June 30, 2008, and each June 30
10thereafter, each regional foundation shall transfer 5% of funds raised in the
11previous fiscal year from the marketing of the rural business tax credits to
12be credited to the enterprise facilitation fund created in K.S.A. 74-50,155,
13and amendments thereto.
14(2) The secretary of commerce may adopt rules and regulations for
15the disbursement of regional foundation funds to the enterprise facilitation
16fund.
17(d) (1) The secretary of commerce is hereby authorized to adopt rules
18and regulations for establishing criteria for evaluating proposals to
19designate regional foundations as defined by this act with the assistance of
20the secretary of revenue.
21(2) The proposal shall set forth the program to be conducted, why the
22program is needed, the estimated amount to be invested in the program,
23composition of the board that shall be making investment decisions,
24policies stating the organization shall offer services to all counties in that
25region and the plans for implementing the program.
26(3) The secretary of commerce shall select regional foundations
27pursuant to rules and regulations adopted pursuant to subsection (d)(1) to
28use the sale of credits to establish regional business development funds.
29(4) The total amount of credits allowed under this act shall not exceed
30$2,500,000 for fiscal year 2005; $2,500,000 for fiscal year 2006;
31$2,000,000 per year for fiscal years 2007 through, and including, 2010,
32and fiscal year 2012, and $1,800,000 for fiscal year 2011. Each region as
33defined by this act shall receive an equal share of this allocation.
34(5) Any credits not sold by such regional foundations shall be
35reclaimed by the secretary from such region and redistributed to other
36regions that sold all credits previously issued.
37(6) The secretary shall annually review and approve or disapprove the
38proposal of each designated regional foundation for continued eligibility
39for tax credits. The department of commerce retains that right to reclaim
40credits in such cases the regional foundation closes or there is
41demonstrated violation of the organization's policies. Changes to the
42investment policies of each regional foundation are subject to approval of
43the secretary.
1(e) Each regional foundation shall administer a regional business
2development fund. The sums generated by contributions to each regional
3business development fund are intended to be distributed to qualified
4entrepreneurs for the purposes of economic and leadership development in
5the region. Such sums shall be allocated by each regional foundation as
6follows:
7(1) Not less than 60% of such funds may be allocated for job creation
8or retention;
9(2) not more than 10% of such funds shall be allocated for
10administrative costs in overseeing particular projects; and
11(3) the remaining funds may be allocated towards other eligible
12activities as provided in subsection (f) in a manner that fits the region's
13priorities and needs.
14(f) Funds in the regional business development funds may be utilized
15by the regional foundation for one or more of the following eligible
16activities:
17(1) Business start-ups;
18(2) business expansion;
19(3) business retention;
20(4) business support services;
21(5) regional leadership development;
22(6) technology improvements; and
23(7) administrative services.
24(g) All interest generated on idle funds administered by the regional
25foundation shall be used by the foundation's board in accordance with
26subsections (e) and (f).
27(h) Any regional foundation may increase or decrease the allocation
28percentages set forth in subsection (e) only upon approval of such
29adjustments by the secretary.
30(i) (1) The amount of credit allowed pursuant to this act, shall not
31exceed 75% of the total amount contributed during the taxable year by the
32taxpayer to a regional foundation approved pursuant to this act.
33(2) If the amount of the credit allowed by this act, exceeds the
34taxpayer's income tax liability imposed under the Kansas income tax act,
35such excess amount shall be refunded to the taxpayer.
36(j) The provisions of this act shall be applicable to all taxable years
37beginning after December 31, 2004, and ending before January 1, 2026.
38Sec. 6. K.S.A. 2025 Supp. 74-8133 is hereby amended to read as
39follows: 74-8133. (a) A credit against the tax imposed by article 32 of
40chapter 79 of the Kansas Statutes Annotated, and amendments thereto, on
41the Kansas taxable income of an angel investor and against the tax
42imposed by K.S.A. 40-252, and amendments thereto, shall be allowed for
43a cash investment in the qualified securities of a qualified Kansas business.
1For tax year 2021 and all tax years thereafter, the credit shall be in a total
2amount of up to 50% of such investors' cash investment in any qualified
3Kansas business, subject to the limitations set forth in subsection (b). This
4Such tax credit may be used in its entirety in the taxable year in which the
5cash investment is made except that no tax credit shall be allowed in a year
6prior to January 1, 2005. If the amount by which that portion of the credit
7allowed by this section exceeds the investors' liability in any one taxable
8year, beginning in the year 2005, the remaining portion of the credit may
9be carried forward until the total amount of the credit is used. If the
10investor is a permitted entity investor, the credit provided by this section
11shall be claimed by the owners of the permitted entity investor in
12proportion to their ownership share of the permitted entity investor.
13(b) For tax year 2021 and all tax years thereafter, the secretary of
14revenue shall not allow tax credits of more than $100,000 for a single
15Kansas business or a total of $350,000 in tax credits for a single year per
16investor who is a natural person or owner of a permitted entity investor.
17No tax credits authorized by this act shall be allowed for any cash
18investments in qualified securities for any year after the year 2026 2031.
19The total amount of tax credits that may be allowed under this section shall
20not exceed:
21(1) $4,000,000 during the tax year 2007;
22(2) $6,000,000 for tax years 2008 through 2010 and 2012 through
232022, except that for tax year 2011, the total amount of tax credits that
24may be allowed under this section shall not exceed $5,000,000;
25(3) $6,500,000 for tax year 2023;
26(4) $7,000,000 for tax year 2024;
27(5) $7,500,000 for tax year 2025; and
28(6) $8,000,000 for tax year 2026 and for each succeeding tax year
29through tax year 2031.
30The balance of unissued tax credits may be carried over for issuance in
31future years until tax year 2026 2031.
32(c) A cash investment in a qualified security shall be deemed to have
33been made on the date of acquisition of the qualified security, as such date
34is determined in accordance with the provisions of the internal revenue
35code.
36(d) Any investor without a current tax liability at the time of the
37investment in a qualified Kansas business, who does not reasonably
38believe that it such investor will owe any such tax for the current taxable
39year and who makes a cash investment in a qualified security of a qualified
40Kansas business shall be deemed to acquire an interest in the nature of a
41transferable credit limited, for tax year 2021 and all tax years thereafter, to
42an amount of up to 50% of this such cash investment. This The interest
43may be transferred to any natural person whether or not such person is
1then an investor and be claimed by the transferee as a credit against the
2transferee's Kansas income tax liability beginning in the year provided in
3subsection (a). No person shall be entitled to a refund for the interest
4created under this section. Only the full credit for any one investment may
5be transferred and this such interest may only be transferred one time. A
6credit acquired by transfer shall be subject to the limitations prescribed in
7this section. Documentation of any credit acquired by transfer shall be
8provided by the investor in the manner required by the director of taxation.
9(e) The reasonable costs of the administration of this act, the review
10of applications for certification as qualified Kansas businesses and the
11issuance of tax credits authorized by this act shall be reimbursed through
12fees paid by the qualified Kansas businesses and the investors or the
13transferees of investors, according to a reasonable fee schedule adopted by
14the secretary by rules and regulations in accordance with the rules and
15regulations filing act.
16Sec. 7. 6. K.S.A. 79-229 is hereby amended to read as follows: 79-
17229. (a) The following described property, to the extent herein specified,
18shall be exempt from all property taxes levied under the laws of the state
19of Kansas: Any new biomass-to-energy plant property or any expanded
20biomass-to-energy plant property.
21(b) The provisions of subsection (a) shall apply from and after
22purchase or commencement of construction or installation of such property
23and for the 10 taxable years immediately following the taxable year in
24which construction or installation of such property is completed.
25(c) The provisions of this section shall apply to all taxable years
26commencing after December 31, 2005, and ending before January 1,
272026.
28(d) As used in this section:
29(1) "Biomass-to-energy plant" has the meaning provided by K.S.A.
3079-32,233, and amendments thereto.
31(2) "Expanded biomass-to-energy plant property" means any real or
32tangible personal property purchased, constructed or installed for
33incorporation in and use as part of an expansion of an existing biomass-to-
34energy plant, construction of which expansion begins after December 31,
352005.
36(3) "Expansion of an existing biomass-to-energy plant" means
37expansion of the capacity of an existing biomass-to-energy plant by at
38least 10% of such capacity.
39(4) "New biomass-to-energy plant property" means any real or
40tangible personal property purchased, constructed or installed for
41incorporation in and use as part of a biomass-to-energy plant, construction
42of which begins after December 31, 2005.
43Sec. 8. 7. K.S.A. 2025 Supp. 79-32,160a is hereby amended to read
1as follows: 79-32,160a. (a) For taxable years commencing after December
231, 1999, and before January 1, 2012, any taxpayer who shall invest in a
3qualified business facility, as defined in K.S.A. 79-32,154(b), and
4amendments thereto, and effective for tax years commencing after
5December 31, 2010, and before January 1, 2012, located in an area other
6than a metropolitan county as defined in either K.S.A. 74-50,114 or 74-
750,211, and amendments thereto, and also meets the definition of a
8business in K.S.A. 74-50,114(b), and amendments thereto, shall be
9allowed a credit for such investment, in an amount determined under
10subsection (b) or (c), as the case requires, against the tax imposed by the
11Kansas income tax act or where the qualified business facility is the
12principal place from which the trade or business of the taxpayer is directed
13or managed and the facility has facilitated the creation of at least 20 new
14full-time positions, against the premium tax or privilege fees imposed
15pursuant to K.S.A. 40-252, and amendments thereto, or as measured by the
16net income of financial institutions imposed pursuant to article 11 of
17chapter 79 of the Kansas Statutes Annotated, and amendments thereto, for
18the taxable year during which commencement of commercial operations,
19as defined in K.S.A. 79-32,154(f), and amendments thereto, occurs at such
20qualified business facility. In the case of a taxpayer who meets the
21definition of a manufacturing business in K.S.A. 74-50,114(d), and
22amendments thereto, no credit shall be allowed under this section unless
23the number of qualified business facility employees, as determined under
24K.S.A. 79-32,154(d), and amendments thereto, engaged or maintained in
25employment at the qualified business facility as a direct result of the
26investment by the taxpayer for the taxable year for which the credit is
27claimed equals or exceeds two. In the case of a taxpayer who meets the
28definition of a nonmanufacturing business in K.S.A. 74-50,114(f), and
29amendments thereto, no credit shall be allowed under this section unless
30the number of qualified business facility employees, as determined under
31K.S.A. 79-32,154(d), and amendments thereto, engaged or maintained in
32employment at the qualified business facility as a direct result of the
33investment by the taxpayer for the taxable year for which the credit is
34claimed equals or exceeds five. Where an employee performs services for
35the taxpayer outside the qualified business facility, the employee shall be
36considered engaged or maintained in employment at the qualified business
37facility if: (1) The employee's service performed outside the qualified
38business facility is incidental to the employee's service inside the qualified
39business facility; or (2) the base of operations or, the place from which the
40service is directed or controlled, is at the qualified business facility.
41(b) The credit allowed by subsection (a) for any taxpayer who invests
42in a qualified business facility that is located in a designated
43nonmetropolitan region established under K.S.A. 74-50,116, and
1amendments thereto, on or after the effective date of this act, shall be a
2portion of the income tax imposed by the Kansas income tax act on the
3taxpayer's Kansas taxable income, the premium tax or privilege fees
4imposed pursuant to K.S.A. 40-252, and amendments thereto, or the
5privilege tax as measured by the net income of financial institutions
6imposed pursuant to article 11 of chapter 79 of the Kansas Statutes
7Annotated, and amendments thereto, for the taxable year for which such
8credit is allowed, but in the case where the qualified business facility
9investment was made prior to January 1, 1996, not in excess of 50% of
10such tax. Such portion shall be an amount equal to the sum of the
11following:
12(1) $2,500 for each qualified business facility employee determined
13under K.S.A. 79-32,154, and amendments thereto; plus
14(2) $1,000 for each $100,000, or major fraction thereof, which shall
15be deemed to be 51% or more, in qualified business facility investment, as
16determined under K.S.A. 79-32,154, and amendments thereto.
17(c) The credit allowed by subsection (a) for any taxpayer who invests
18in a qualified business facility that is not located in a nonmetropolitan
19region established under K.S.A. 74-50,116, and amendments thereto, and
20effective for tax years commencing after December 31, 2010, and before
21January 1, 2012, located in an area other than a metropolitan county as
22defined in either K.S.A. 74-50,114 or 74-50,211, and amendments thereto,
23and that also meets the definition of business in K.S.A. 74-50,114(b), and
24amendments thereto, on or after the effective date of this act, shall be a
25portion of the income tax imposed by the Kansas income tax act on the
26taxpayer's Kansas taxable income, the premium tax or privilege fees
27imposed pursuant to K.S.A. 40-252, and amendments thereto, or the
28privilege tax as measured by the net income of financial institutions
29imposed pursuant to article 11 of chapter 79 of the Kansas Statutes
30Annotated, and amendments thereto, for the taxable year for which such
31credit is allowed, but in the case where the qualified business facility
32investment was made prior to January 1, 1996, not in excess of 50% of
33such tax. Such portion shall be an amount equal to the sum of the
34following:
35(1) $1,500 for each qualified business facility employee as
36determined under K.S.A. 79-32,154, and amendments thereto; and
37(2) $1,000 for each $100,000, or major fraction thereof, which shall
38be deemed to be 51% or more, in qualified business facility investment as
39determined under K.S.A. 79-32,154, and amendments thereto.
40(d) The credit allowed by subsection (a) for each qualified business
41facility employee and for qualified business facility investment shall be a
42one-time credit. If the amount of the credit allowed under subsection (a)
43exceeds the tax imposed by the Kansas income tax act on the taxpayer's
1Kansas taxable income, the premium tax and privilege fees imposed
2pursuant to K.S.A. 40-252, and amendments thereto, or the privilege tax as
3measured by the net income of financial institutions imposed pursuant to
4article 11 of chapter 79 of the Kansas Statutes Annotated, and amendments
5thereto, for the taxable year, or in the case where the qualified business
6facility investment was made prior to January 1, 1996, 50% of such tax
7imposed upon the amount which exceeds such tax liability or such portion
8thereof may be carried over for credit in the same manner in the
9succeeding taxable years until the total amount of such credit is used.
10Except that, before the credit is allowed, a taxpayer, who meets the
11definition of a manufacturing business in K.S.A. 74-50,114(d), and
12amendments thereto, shall recertify annually that the net increase of a
13minimum of two qualified business facility employees has continued to be
14maintained and a taxpayer, who meets the definition of a
15nonmanufacturing business in K.S.A. 74-50,114(f), and amendments
16thereto, shall recertify annually that the net increase of a minimum of five
17qualified business employees has continued to be maintained.
18(e) Notwithstanding the foregoing provisions of this section, and
19except as otherwise provided in this subsection, any taxpayer qualified and
20certified under the provisions of K.S.A. 74-50,131, and amendments
21thereto, that prior to making a commitment to invest in a qualified Kansas
22business, has filed a certificate of intent to invest in a qualified business
23facility in a form satisfactory to the secretary of commerce, shall be
24entitled to a credit in an amount equal to 10% of that portion of the
25qualified business facility investment that exceeds $50,000 in lieu of the
26credit provided in subsection (b)(2) or (c)(2) without regard to the number
27of qualified business facility employees engaged or maintained in
28employment at the qualified business facility. For tax years beginning on
29or after January 1, 2012, for a qualified business facility investment in
30Douglas, Johnson, Sedgwick, Shawnee or Wyandotte county, such credit
31shall be in an amount equal to 10% of that portion of the qualified business
32facility investment that exceeds $1,000,000. Any taxpayer who has filed a
33certificate of intent to invest in a qualified business facility pursuant to this
34subsection in Douglas, Johnson, Sedgwick, Shawnee or Wyandotte county
35prior to December 31, 2011, and commences investments in a qualified
36business facility prior to December 31, 2013, may claim credits under
37K.S.A. 74-50,131, 74-50,132 and 79-32,160a(e), and amendments thereto,
38in an amount equal to 10% of that portion of the qualified business facility
39investment that exceeds $50,000. Timing modifications may be authorized
40at the discretion of the secretary of commerce and the secretary of revenue
41during the transition period. The credit allowed by this subsection shall be
42a one-time credit. If the amount thereof exceeds the tax imposed by the
43Kansas income tax act on the taxpayer's Kansas taxable income or the
1premium tax or privilege fees imposed pursuant to K.S.A. 40-252, and
2amendments thereto, or the privilege tax as measured by net income of
3financial institutions imposed pursuant to article 11 of chapter 79 of the
4Kansas Statutes Annotated, and amendments thereto, for the taxable year,
5the amount thereof that exceeds such tax liability may be carried forward
6for credit in the succeeding taxable year or years until the total amount of
7the tax credit is used, except that no such tax credit shall be carried
8forward for deduction after the 16th taxable year succeeding the taxable
9year in which such credit initially was claimed, and no carryforward shall
10be allowed for deduction in any succeeding taxable year unless the
11taxpayer certifies under oath that the taxpayer continues to meet the
12requirements of K.S.A. 74-50,131, and amendments thereto, and this act.
13In no event shall any credit allowed under this section that expired during
14any taxable year prior to the taxable year commencing January 1, 2011, be
15revived under the provisions of this act.
16(f) For projects placed into service on and after January 1, 2021, a
17any taxpayer, including all pass-through entities, awarded a tax credit may
18transfer up to 50% of the unused portion of the tax credit allowed under
19subsection (e), as provided in this subsection. The taxpayer may make a
20transfer to one or more transferees, but the total of all transfers shall not
21exceed 50% of the taxpayer's tax credit. The taxpayer shall may make the
22transfer or transfers within a single tax year at any time during the
23carryforward period allowed by this subsection. The taxpayer shall ensure
24that any tax credit transferred has not been used, including any use by any
25partner, owner or shareholder of a pass-through entity. The credit may be
26transferred to any individual or entity and shall be claimed in the year the
27credit was transferred against the transferee's tax liability for the income
28tax under the Kansas income tax act or the premium tax or privilege fees
29imposed pursuant to K.S.A. 40-252, and amendments thereto, or the
30privilege tax as measured by the net income of financial institutions
31imposed pursuant to article 11 of chapter 79 of the Kansas Statutes
32Annotated, and amendments thereto. The amount of the credit that exceeds
33the transferee's tax liability for such year may be carried forward for credit
34in the succeeding taxable year or years until the total amount of the tax
35credit is used, except that no such credit shall be carried forward for
36deduction after the 16th taxable year succeeding the taxable year in which
37such credit was initially claimed. The taxpayer or transferee shall provide
38such documentation of the tax credit transfer to the secretary of revenue as
39may be required by the secretary.
40(g) Notwithstanding the provisions of subsection (f), for projects
41placed into service on and after January 1, 2026, by an S corporation that
42is wholly owned by an employee stock ownership plan, as defined in the
43internal revenue code of 1986, as amended, U.S.C. § 4975(e)(7), and the
1trust thereunder, such S corporation and the trust thereunder may make
2one or more transfers that may total up to 100% of the unused portion of
3the tax credit allowed pursuant to subsection (e). Such transfer or
4transfers may be made to one or more transferees in one or more tax years
5and at any time during the carryforward period allowed by subsection (f).
6The taxpayer shall ensure that any transferred tax credit or portion of the
7tax credit has not been used. The tax credit or portion thereof may be
8transferred to any individual or entity and shall be claimed in the year that
9the credit was transferred against the transferee's tax liability for the
10income tax under the Kansas income tax act or the premium tax or
11privilege fees imposed pursuant to K.S.A. 40-252, and amendments
12thereto, or the privilege tax as measured by the net income of financial
13institutions imposed pursuant to article 11 of chapter 79 of the Kansas
14Statutes Annotated, and amendments thereto. The amount of the credit that
15exceeds the transferee's tax liability for such year may be carried forward
16for credit in the succeeding taxable year or years until the total amount of
17the tax credit is used, except that no such credit shall be carried forward
18for transfer or deduction after the 16th taxable year succeeding the taxable
19year in which such credit was initially claimed. The taxpayer or transferee
20shall provide such documentation of the tax credit transfer to the secretary
21of revenue as may be required by the secretary.
22(h) In the event the tax credit earned by the taxpayer and transferred
23to a transferee is later disallowed in whole or in part by the secretary of
24revenue, the taxpayer that originally earned the tax credit shall be liable for
25repayment to the state in the amount disallowed.
26(h)(i) For tax years commencing after December 31, 2005, any
27taxpayer claiming credits pursuant to this section, as a condition for
28claiming and qualifying for such credits, shall provide information
29pursuant to K.S.A. 79-32,243, and amendments thereto, as part of the tax
30return in which such credits are claimed. Such credits shall not be denied
31solely on the basis of the contents of the information provided by the
32taxpayer pursuant to K.S.A. 79-32,243, and amendments thereto.
33(i)(j) This section and K.S.A. 79-32,160b, and amendments thereto,
34shall be a part of and supplemental to the job expansion and investment
35credit act of 1976, and amendments thereto.
36Sec. 9. K.S.A. 2025 Supp. 79-32,176a is hereby amended to read as
37follows: 79-32,176a. (a) Any resident individual taxpayer who makes
38expenditures for the purpose of making all or any portion of an existing
39facility accessible to individuals with a disability, which facility is used as,
40or in connection with, such taxpayer's principal dwelling or the principal
41dwelling of a lineal ascendant or descendant, including construction of a
42small barrier-free living unit attached to such principal dwelling, shall be
43entitled to claim a tax credit in an amount equal to the applicable
1percentage of such expenditures or $15,000, whichever is less, against the
2income tax liability imposed against such taxpayer pursuant to article 32 of
3chapter 79 of the Kansas Statutes Annotated, and amendments thereto.
4Nothing in this subsection shall be deemed to prevent any such taxpayer
5from claiming such credit: (1) For each principal dwelling in which the
6taxpayer or lineal ascendant or descendant may reside, or facility used in
7connection therewith; or (2) more than once, but not more often than once
8every four-year period of time. The applicable percentage of such
9expenditures eligible for credit shall be as set forth in the following
10schedules:
11Married individuals filing joint returns.
12 % of
13 Taxpayers expenditures
14 Federal Adjusted eligible for
15 Gross Income credit
16$0 to $60,000 100%
17Over $60,000 but not over $70,000 90%
18Over $70,000 but not over $80,000 80%
19Over $80,000 but not over $90,000 70%
20Over $90,000 but not over $100,000 60%
21Over $100,000 but not over $110,000 50%
22Over $110,000 but not over $120,000 40%
23Over $120,000 but not over $130,000 30%
24Over $130,000 but not over $140,000 20%
25Over $140,000 but not over $150,000 10%
26Over $150,000 0%
27All other individuals.
28 % of
29 Taxpayers expenditures
30 Federal Adjusted eligible for
31 Gross Income credit
32$0 to $40,000 100%
33Over $40,000 but not over $50,000 90%
34Over $50,000 but not over $60,000 80%
35Over $60,000 but not over $70,000 70%
36Over $70,000 but not over $80,000 60%
37Over $80,000 but not over $90,000 50%
38Over $90,000 but not over $100,000 40%
39Over $100,000 but not over $110,000 30%
40Over $110,000 but not over $120,000 20%
41Over $120,000 but not over $130,000 10%
42Over $130,000 0%
43Such tax credit shall be deducted from the taxpayer's income tax
1liability for the taxable year in which the expenditures are made by the
2taxpayer. If the amount of such tax credit exceeds the taxpayer's income
3tax liability for such taxable year, the amount thereof which exceeds such
4tax liability may be carried over for deduction from the taxpayer's income
5tax liability in the next succeeding taxable year or years until the total
6amount of the tax credit has been deducted from tax liability, except that
7no such tax credit shall be carried over for deduction after the fourth
8taxable year succeeding the taxable year in which the expenditures are
9made.
10(b) Notwithstanding the provisions of subsection (a), if the amount of
11the taxpayer's tax liability is less than $3,750 in the first year in which the
12credit is claimed under this section, an amount equal to the amount by
13which 1/4 of the credit allowable under this section exceeds such tax
14liability shall be refunded to the taxpayer and the amount by which such
15credit exceeds such tax liability less the amount of such refund may be
16carried over for the next three succeeding taxable years. If the amount of
17the taxpayer's tax liability is less than $3,750 in the second year in which
18the credit is claimed under this section, an amount equal to the amount by
19which 1/3 of the amount of the credit carried over from the first taxable
20year exceeds such tax liability shall be refunded to the taxpayer and the
21amount by which the amount of the credit carried over from the first
22taxable year exceeds such tax liability less the amount of such refund may
23be carried over for the next two succeeding taxable years. If the amount of
24the taxpayer's tax liability is less than $3,750 in the third year in which the
25credit is claimed under this section, an amount equal to the amount by
26which ½ of the amount carried over from the second taxable year exceeds
27such tax liability shall be refunded to the taxpayer and the amount by
28which the amount of the credit carried over from the second taxable year
29exceeds such tax liability less the amount of such refund may be carried
30over to the next succeeding taxable year. If the amount of the credit carried
31over from the third taxable year exceeds the taxpayer's income tax liability
32for such year, the amount thereof which exceeds such tax liability shall be
33refunded to the taxpayer.
34(c) In the case of all tax years commencing after December 31, 2021,
35the maximum tax credit amount, as prescribed in subsection (a), and the
36tax liability threshold amount in the first, second and third years, as
37prescribed in subsection (b), shall be increased by an amount equal to such
38maximum tax credit amount and tax liability threshold amount multiplied
39by the cost-of-living adjustment determined under section 1(f)(3) of the
40federal internal revenue code for the calendar year in which the taxable
41year commences.
42(d) The provisions of this section are applicable to tax year 2021, and
43all tax years thereafter ending before January 1, 2026. No new tax credit
1pursuant to this section shall be awarded for any tax year after tax year
22025.
3Sec. 10. 8. K.S.A. 79-32,177 is hereby amended to read as follows:
479-32,177. Any taxpayer who makes expenditures for the purpose of
5making all or any portion of an existing facility accessible to individuals
6with a disability, or who makes expenditures for the purpose of making all
7or any portion of a facility or of equipment usable for the employment of
8individuals with a disability, which facility or equipment is on real
9property located in this state and used in a trade or business or held for the
10production of income, shall be entitled to claim an income tax credit in an
11amount equal to 50% of such expenditures or, the amount of $10,000,
12whichever is less, against the income tax liability imposed against such
13taxpayer pursuant to article 32 of chapter 79 of the Kansas Statutes
14Annotated, and amendments thereto. Such tax credit shall be deducted
15from the taxpayer's income tax liability for the taxable year in which the
16expenditures are made by the taxpayer. If the amount of such tax credit
17exceeds the taxpayer's income tax liability for such taxable year, the
18amount thereof which exceeds such tax liability may be carried over for
19deduction from the taxpayer's income tax liability in the next succeeding
20taxable year or years until the total amount of the tax credit has been
21deducted from tax liability, except that no such tax credit shall be carried
22over for deduction after the fourth taxable year succeeding the taxable year
23in which the expenditures are made. No new tax credit pursuant to this
24section shall be awarded for any tax year after tax year 2025.
25Sec. 11. 9. K.S.A. 79-32,179 is hereby amended to read as follows:
2679-32,179. The provisions of this act shall apply to all taxable years
27commencing after December 31, 1977, except that the provisions of K.S.A.
2879-32,175 through 79-32,178 79-32,177, and amendments thereto, shall
29not apply to taxable years commencing after December 31, 2025.
30Sec. 12. 10. K.S.A. 79-32,180 is hereby amended to read as follows:
3179-32,180. The provisions of this act K.S.A. 79-32,175 through 79-32,178
3279-32,177, and amendments thereto, shall be applicable to all taxable
33years commencing after December 31, 1980, and ending before January 1,
342026.
35Sec. 13. 11. K.S.A. 79-32,201 is hereby amended to read as follows:
3679-32,201. (a) Any taxpayer who makes expenditures for a qualified
37alternative-fueled motor vehicle or alternative-fuel fueling station shall be
38allowed a credit against the income tax imposed by article 32 of chapter 79
39of the Kansas Statutes Annotated, as follows:
40(1) For any qualified alternative-fueled motor vehicle placed in
41service on or after January 1, 1996, and before January 1, 2005, an amount
42equal to 50% of the incremental cost or conversion cost for each qualified
43alternative-fueled motor vehicle but not to exceed $3,000 for each such
1motor vehicle with a gross vehicle weight of less than 10,000 lbs.; $5,000
2for a heavy duty motor vehicle with a gross vehicle weight of greater than
310,000 lbs. but less than 26,000 lbs.; and $50,000 for motor vehicles
4having a gross vehicle weight of greater than 26,000 lbs.;
5(2) for any qualified alternative-fueled motor vehicle placed in
6service on or after January 1, 2005, an amount equal to 40% of the
7incremental cost or conversion cost for each qualified alternative-fueled
8motor vehicle, but not to exceed $2,400 for each such motor vehicle with a
9gross vehicle weight of less than 10,000 lbs.; $4,000 for a heavy duty
10motor vehicle with a gross vehicle weight of greater than 10,000 lbs. but
11less than 26,000 lbs.; and $40,000 for motor vehicles having a gross
12vehicle weight of greater than 26,000 lbs.;
13(3) for any qualified alternative-fuel fueling station placed in service
14on or after January 1, 1996, and before January 1, 2005, an amount equal
15to 50% of the total amount expended for each qualified alternative-fuel
16fueling station but not to exceed $200,000 for each fueling station;
17(4) for any qualified alternative-fuel fueling station placed in service
18on or after January 1, 2005, and before January 1, 2009, an amount equal
19to 40% of the total amount expended for each qualified alternative-fuel
20fueling station, but not to exceed $160,000 for each fueling station; and
21(5) for any qualified alternative-fuel fueling station placed in service
22on or after January 1, 2009, an amount equal to 40% of the total amount
23expended for each qualified alternative-fuel fueling station, but not to
24exceed $100,000 for each fueling station.
25(b) If no credit has been claimed pursuant to subsection (a), a credit in
26an amount not exceeding the lesser of 5% of the cost of the vehicle or
27$750 shall be allowed to a taxpayer who purchases a motor vehicle
28equipped by the vehicle manufacturer with an alternative fuel system and
29who is unable or elects not to determine the exact basis attributable to such
30property. The credit under this subsection shall be allowed only to the first
31individual to take title to such motor vehicle, other than for resale. The
32credit under this subsection for motor vehicles which are capable of
33operating on a blend of 85% ethanol and 15% gasoline shall be allowed for
34taxable years commencing after December 31, 1999, only if the individual
35claiming the credit furnishes evidence of the purchase, during the period of
36time beginning with the date of purchase of such vehicle and ending on
37December 31 of the next succeeding calendar year, of 500 gallons of such
38ethanol and gasoline blend as may be required or is satisfactory to the
39secretary of revenue.
40(c) The tax credit under subsection (a)(1) through (a)(4) or (b) shall
41be deducted from the taxpayer's income tax liability for the taxable year in
42which the expenditures are made by the taxpayer. If the amount of the tax
43credit exceeds the taxpayer's income tax liability for the taxable year, the
1amount which exceeds the tax liability may be carried over for deduction
2from the taxpayer's income tax liability in the next succeeding taxable year
3or years until the total amount of the tax credit has been deducted from tax
4liability, except that no such tax credit shall be carried over for deduction
5after the third taxable year succeeding the taxable year in which the
6expenditures are made.
7(d) The tax credit under subsection (a)(5) shall be deducted from the
8taxpayer's income tax liability for the taxable year in which the
9expenditures are made by the taxpayer. If the amount of the tax credit
10exceeds the taxpayer's income tax liability for the taxable year, the amount
11which exceeds the tax liability may be carried over for deduction from the
12taxpayer's income tax liability in the next succeeding taxable year or years
13until the total amount of the tax credit has been deducted from tax liability,
14except that no such tax credit shall be carried over for deduction after the
15fourth taxable year in which the expenditures are made.
16(e) As used in this section:
17(1) "Alternative fuel" means a combustible liquid derived from grain
18starch, oil seed, animal fat or other biomass; or produced from biogas
19source, including any nonfossilized, decaying, organic matter.
20(2) "Qualified alternative-fueled motor vehicle" means a motor
21vehicle that operates on an alternative fuel, meets or exceeds the clean fuel
22vehicle standards in the federal clean air act amendments of 1990, Title II
23and meets one of the following categories:
24(A) Bi-fuel motor vehicle: A motor vehicle with two separate fuel
25systems designed to run on either an alternative fuel or conventional fuel,
26using only one fuel at a time;
27(B) dedicated motor vehicle: A motor vehicle with an engine designed
28to operate on a single alternative fuel only; or
29(C) flexible fuel motor vehicle: A motor vehicle that may operate on a
30blend of an alternative fuel with a conventional fuel, such as E-85 (85%
31ethanol and 15% gasoline) or M-85 (85% methanol and 15% gasoline), as
32long as such motor vehicle is capable of operating on at least an 85%
33alternative fuel blend.
34(3) "Qualified alternative-fuel fueling station" means the property
35which is directly related to the delivery of alternative fuel into the fuel tank
36of a motor vehicle propelled by such fuel, including the compression
37equipment, storage vessels and dispensers for such fuel at the point where
38such fuel is delivered but only if such property is primarily used to deliver
39such fuel for use in a qualified alternative-fueled motor vehicle.
40(4) "Incremental cost" means the cost that results from subtracting the
41manufacturer's list price of the motor vehicle operating on conventional
42gasoline or diesel fuel from the manufacturer's list price of the same model
43motor vehicle designed to operate on an alternative fuel.
1(5) "Conversion cost" means the cost that results from modifying a
2motor vehicle which is propelled by gasoline or diesel to be propelled by
3an alternative fuel.
4(6) "Taxpayer" means any person who owns and operates a qualified
5alternative-fueled vehicle licensed in the state of Kansas or who makes an
6expenditure for a qualified alternative-fuel fueling station.
7(7) "Person" means every natural person, association, partnership,
8limited liability company, limited partnership or corporation.
9(f) Except as otherwise more specifically provided, the provisions of
10this section shall apply to all taxable years commencing after December
1131, 1995, and ending before January 1, 2026.
12(g) For tax year 2013 and all tax years thereafter through tax year
132025, the income tax credit provided by this section shall only be available
14to taxpayers subject to the income tax on corporations imposed pursuant to
15subsection (c) of K.S.A. 79-32,110, and amendments thereto, and shall be
16applied only against such taxpayer's corporate income tax liability. No new
17tax credit provided by this section shall be awarded to any taxpayer for
18any tax year after tax year 2025.
19Sec. 14. 12. K.S.A. 79-32,204 is hereby amended to read as follows:
2079-32,204. (a) As used in this section:
21(1) Terms have the meanings provided by K.S.A. 65-1,178, and
22amendments thereto;
23(2) "qualified swine facility" means a swine facility that: (A) Is
24owned and operated by a sole proprietorship or partnership or by a family
25farm corporation, authorized farm corporation, limited liability agricultural
26company, family farm limited liability agricultural company, limited
27agricultural partnership, family trust, authorized trust or testamentary trust,
28as defined by K.S.A. 17-5903, and amendments thereto; and (B) is
29utilizing its swine waste management system on January 1, 1998; and
30(3) "required improvements to a qualified swine facility" means
31capital improvements that the secretary of health and environment certifies
32to the director of taxation: (A) Are required for a qualified swine facility to
33comply with the standards and requirements established pursuant to
34K.S.A. 65-1,178 through 65-1,198, and amendments thereto, or pursuant
35to the amendments made by this act to K.S.A. 65-171d, and amendments
36thereto; and (B) are not required because of expansion for which a permit
37has not been issued or applied for before the effective date of this act.
38(b) There shall be allowed as a credit against the tax liability of a
39taxpayer imposed under the Kansas income tax act an amount equal to not
40more than 50% of the costs incurred by the taxpayer for required
41improvements to a qualified swine facility. The tax credit allowed by this
42subsection shall be deducted from the taxpayer's income tax liability for
43the taxable year in which the expenditures are made by the taxpayer. If the
1amount of such tax credit exceeds the taxpayer's income tax liability for
2such taxable year, the taxpayer may carry over the amount thereof that
3exceeds such tax liability for deduction from the taxpayer's income tax
4liability in the next succeeding taxable year or years until the total amount
5of the tax credit has been deducted from tax liability, except that no such
6tax credit shall be carried over for deduction after the fourth taxable year
7succeeding the year in which the costs are incurred.
8(c) The provisions of this section shall be applicable to all taxable
9years commencing after December 31, 1997, and ending before January 1,
102026.
11(d) For tax year 2013 and all tax years thereafter before tax year
122026, the income tax credit provided by this section shall only be available
13to taxpayers subject to the income tax on corporations imposed pursuant to
14subsection (c) of K.S.A. 79-32,110, and amendments thereto, and shall be
15applied only against such taxpayer's corporate income tax liability. No new
16tax credit pursuant to this section shall be awarded to any taxpayer for
17any tax year after tax year 2025.
18Sec. 15. 13. K.S.A. 79-32,207 is hereby amended to read as follows:
1979-32,207. (a) As used in this section, "abandoned oil or gas well" means
20an abandoned well, as defined by K.S.A. 55-191, and amendments thereto:
21(1) The drilling of which was commenced before January 1, 1970;
22and
23(2) which is located on land owned by the taxpayer claiming the tax
24credit allowed by this section.
25(b) For any taxable year commencing after December 31, 2000, and
26ending before January 1, 2026, a credit shall be allowed against the tax
27imposed by the Kansas income tax act on the Kansas taxable income of a
28taxpayer for expenditures made for the purpose of plugging any
29abandoned oil or gas well in accordance with rules and regulations of the
30state corporation commission applicable thereto, in an amount equal to
3150% of such expenditures made in the taxable year.
32(c) If the amount of the tax credit allowed by this section exceeds the
33taxpayer's income tax liability for such taxable year, the amount thereof
34which exceeds such tax liability may be carried over for deduction from
35the taxpayer's income tax liability in the next succeeding taxable year or
36years until the total amount of the tax credit has been deducted from tax
37liability.
38(d) The total amount of credits allowed taxpayers pursuant to this
39section, including the amount of credits carried over under subsection (c),
40shall not exceed $250,000 for any one fiscal year.
41(e) The secretary of revenue shall adopt such rules and regulations as
42necessary to carry out the purposes of this section.
43(f) For tax year 2013 and all tax years thereafter through tax year
12025, the income tax credit provided by this section shall only be available
2to taxpayers subject to the income tax on corporations imposed pursuant to
3subsection (c) of K.S.A. 79-32,110, and amendments thereto, and shall be
4applied only against such taxpayer's corporate income tax liability. No new
5tax credit pursuant to this section shall be awarded to any taxpayer for
6any tax year after tax year 2025.
7Sec. 16. K.S.A. 79-32,222 is hereby amended to read as follows: 79-
832,222. (a) As used in this section:
9(1) "Refinery" has the meaning provided by K.S.A. 79-32,217, and
10amendments thereto.
11(2) "Qualified expenditures" means expenditures which the secretary
12of health and environment certifies to the director of taxation are required
13for an existing refinery to comply with environmental standards or
14requirements established pursuant to federal statute or regulation, or state
15statute or rules and regulation, adopted after December 31, 2006.
16(b) There shall be allowed as a credit against the tax liability of a
17taxpayer imposed under the Kansas income tax act an amount equal to the
18taxpayer's qualified expenditures. The tax credit allowed by this subsection
19shall be deducted from the taxpayer's income tax liability for the taxable
20year in which the expenditures are made by the taxpayer. If the amount of
21such tax credit exceeds the taxpayer's income tax liability for such taxable
22year, the taxpayer may carry over the amount thereof that exceeds such tax
23liability for deduction from the taxpayer's income tax liability in the next
24succeeding taxable year or years until the total amount of the tax credit has
25been deducted from tax liability, except that no such tax credit shall be
26carried over for deduction after the fourth taxable year succeeding the year
27in which the costs are incurred.
28(c) (1) To qualify the expenditures of the tax credit allowed by this
29section, a taxpayer shall apply to the secretary of health and environment
30for a certification that the costs were incurred to comply with
31environmental standards or requirements as specified in subsection (a).
32The secretary shall prescribe the form of the application, which shall
33include, but not be limited to, the following information: (A) A detailed
34description of the refinery project that is the subject of the expenditure; (B)
35a citation to the applicable federal or state statutes, regulations or rules and
36regulations which require the environmental compliance; (C) a detailed
37accounting of the costs incurred for the environmental compliance; and
38(D) a certification by a responsible official that, based on information and
39belief formed after reasonable inquiry, the statements and information in
40the application are true, accurate and complete.
41(2) If the secretary of health and environment determines that the
42expenditures were incurred to comply with environmental standards or
43requirements as specified in subsection (a), the secretary shall issue a
1certificate of compliance to the director of taxation.
2(3) The secretary of health and environment may adopt rules and
3regulations to administer the provisions of this subsection, including rules
4and regulations to fix, charge and collect an application fee to cover all or
5any part of the department of health and environment's cost of certifying
6the taxpayer's qualified expenditures under this subsection.
7(d) The provisions of this section shall be applicable to all taxable
8years commencing after December 31, 2006, and ending before January 1,
92026.
10(e) For tax year 2013 and all tax years thereafter through tax year
112025, the income tax credit provided by this section shall only be available
12to taxpayers subject to the income tax on corporations imposed pursuant to
13subsection (c) of K.S.A. 79-32,110, and amendments thereto, and shall be
14applied only against such taxpayer's corporate income tax liability. No new
15tax credit pursuant to this section shall be awarded to any taxpayer for
16any tax year after tax year 2025.
17Sec. 17. 14. K.S.A. 79-32,256 is hereby amended to read as follows:
1879-32,256. (a) A taxpayer shall be entitled to a deduction from Kansas
19adjusted gross income with respect to the amortization of the amortizable
20costs of carbon dioxide capture, sequestration or utilization machinery and
21equipment based upon a period of 10 years. Such amortization deduction
22shall be an amount equal to 55% of the amortizable costs of such
23machinery and equipment for the first taxable year in which such
24machinery and equipment are in operation and 5% of the amortizable costs
25of such machinery and equipment for each of the next nine taxable years.
26(b) The election of the taxpayer to claim the deduction allowed by
27subsection (a) shall be made by filing a statement of such election with the
28secretary of revenue in the manner and form and within the time
29prescribed by rules and regulations adopted by the secretary.
30(c) The provisions of this section shall apply to all taxable years
31commencing after December 31, 2007, and ending before January 1,
322026.
33(d) The secretary of revenue shall adopt such rules and regulations as
34deemed necessary to carry out the provisions of this section.
35(e) As used in this section, "carbon dioxide capture, sequestration or
36utilization machinery and equipment" means any machinery and
37equipment which is located in this state and is: (1) Used to capture carbon
38dioxide from industrial and other anthropogenic sources, or to convert
39such carbon dioxide into one or more products; (2) used to inject carbon
40dioxide into a carbon dioxide injection well, as defined in K.S.A. 55-1637,
41and amendments thereto; or (3) used to recover carbon dioxide from
42sequestration.
43Sec. 18. 15. K.S.A. 40-2246, 65-7107, 74-50,131, 74-50,154, 79-229,
179-32,177, 79-32,179, 79-32,180, 79-32,201, 79-32,204, 79-32,207, 79-
232,218, 79-32,222, 79-32,233, 79-32,234, 79-32,235, 79-32,236, 79-
332,237, 79-32,245, 79-32,246, 79-32,247, 79-32,248, 79-32,249, 79-
432,251, 79-32,252, 79-32,253, 79-32,254, 79-32,255 and 79-32,256 and
5K.S.A. 2025 Supp. 32-1438, 74-8133, and 79-32,160a, 79-32,176a, 79-
632,275 and 79-32,295 are hereby repealed.
7Sec. 19. 16. This act shall take effect and be in force from and after
8its publication in the statute book.