Questions and Answers

Identifying Information:Questions and Answers Relating to Qualifications for the Rural Opportunity Zone (ROZ) Credit for Calendar Year 2012
Tax Type:Individual Income Tax
Brief Description:Questions and Answers Relating to Qualifications for the Rural Opportunity Zone (ROZ) Credit for Calendar Year 2012
Keywords:
Approval Date:09/26/2011



Body:
QUALIFICATIONS FOR THE
RURAL OPPORTUNITY ZONE (ROZ) CREDIT
For
Calendar Year 2012

The 2011 Legislative Session passed Senate Bill 198 which designates 50 counties in Kansas as Rural Opportunity Zones (ROZ). As part of the bill, certain out-of-state taxpayers who relocate to these counties are effectively provided an income tax exemption.

The counties which have received the ROZ designation are:
The income tax provisions in the Bill provide that for tax years 2012 through 2016 a resident individual taxpayer will receive as a credit against their tax liability an amount equal to their income tax liability when the resident individual:
For many individuals it should be possible to determine whether you qualify for the ROZ credit for tax year 2012 by answering three simple questions. These questions are set forth, below, along with an explanation of the meaning of your answers.

If you have trouble answering these questions, or if your answers don’t clearly determine whether you qualify for the ROZ credit, you will likely need a better understanding of the concept of “domicile” or the definition of “Kansas source income”. A brief explanation of the concept of “domicile” and the definition of “Kansas source income” is provided below, and by understanding these you should be able to determine how to answer the questions and whether you will qualify for the ROZ credit.

Please note this publication is only intended to provide you with a guideline for determining whether you qualify for the ROZ credit. The final decision as to whether you qualify for the ROZ credit will be made by the Department of Revenue after reviewing the facts of your particular situation.


QUESTIONS

If you answered Question 1 “No”, Question 2 “Yes”, and Question 3 “No”, and Question 4 “Yes”, you meet the requirements for the Rural Opportunity Zone credit for tax year 2012.

If you answered Question 2 or Question 4 “No”, you do not qualify for the Rural Opportunity Zone credit.

If you answered Question 1 or Question 3 “Yes” you may meet the requirements for the Rural Opportunity Zone credit, but there are additional considerations. For additional information regarding Question 1, see Determining Domicile in Kansas, below. For additional information regarding Question 3, see Definition of Kansas Source Income, below.

Determining Domicile in Kansas

In order to qualify for the Rural Opportunity Zone (ROZ) credit, a person must establish their domicile in a rural opportunity zone on or after July 1, 2011 and prior to January 1, 2016, and must have been domiciled outside Kansas for five or more years immediately prior to establishing their domicile in a rural opportunity zone in Kansas. In addition, they must be domiciled in a rural opportunity zone during the entire year for which the credit is claimed. Because of these requirements, it is important to understand what “domicile” means.

Domicile Defined

For Kansas income tax purposes, the term “domicile” is explained in Kansas Administrative Regulation (K.A.R.) 92-12-4a. As stated in the regulation, “domicile” means “that place in which a person’s habitation is fixed, without any present intention of removal, and to which, whenever absent, that person intends to return.” Simply stated, a person’s domicile is the place they call home.
Basic Rules of Domicile

When discussing domicile, certain basic rules apply. These rules, which are set forth in K.A.R. 92-12-4a, include the following:

One Domicile at a Time

Each person shall have only one domicile at any particular time. Once shown to exist, a person’s domicile shall be presumed to continue until the contrary is shown. The absence of any intention to abandon an existing domicile shall be considered to be equivalent to the intention to retain the domicile.

A person who leaves their domicile to go into another jurisdiction for temporary purposes shall not be considered to have lost the domicile. The mere intention to acquire a new domicile, without the fact of physical removal, shall not change a person’s domicile, and the fact of physical removal from a person’s domicile, without the intention to remain absent, shall not change that person’s domicile.

If a person whose domicile is in Kansas is absent from Kansas for more than six months of the tax year, that person shall not be presumed to have lost that domicile. If a person leaves this state to accept a job assignment in another jurisdiction, that person shall not be presumed to have lost that person’s domicile in this state.

A person who is temporarily employed in Kansas shall not be deemed to have acquired a domicile Kansas if, during that period, the person maintains their domicile outside of the state of Kansas.

Establishing or Abandoning a Domicile in Kansas

A person shall be considered to have established their domicile in Kansas on the date they arrive in Kansas for other than temporary or transitory purposes. A person shall be considered to have abandoned their Kansas domicile on the date they leave Kansas without any intention to return to Kansas.

Citizens of Foreign Countries

Any citizen of a foreign country may acquire a domicile for Kansas tax purposes without surrendering that person’s rights as a citizen of that country.

Soldiers and Sailors

Except for a person who is covered by the provisions of the soldiers’ and sailors’ civil relief act of 1940, 50 U.S.C. app. 574, as amended by the servicemembers civil relief act, public law 108-189, there shall be a presumption that the place where a person’s family is domiciled is that person’s domicile.

Married People

The domicile of a person who is married shall be the same as their spouse unless there is affirmative evidence to the contrary, the husband and wife are legally separated, or the marriage has been dissolved.

Domicile Away From Family

When a person has made a home at any place with the intention of remaining there indefinitely and they neither live at the home in which their family lives nor intends to do so, then that person shall be deemed to have established a domicile separate from their family.

Minor Children

If a minor child is not emancipated, the domicile of the child’s parents shall be the domicile of the child. The domicile of the parent who has legal custody of the child shall be the domicile of the child.
Manifestations of Intent

A person’s domicile - the place they call home - is a matter of intent. Because a person’s intentions can’t be determined directly, they are determined indirectly by looking at how those intentions are manifested. The following factors may be considered in determining whether or not a person’s domicile is in Kansas, although none of these factors shall, by itself, be a determinant of a person’s domicile:
Definition of Kansas Source Income

The term “Kansas source income” is defined by Kansas law, specifically in K.S.A. 79-32,109. The statute provides:

In order to qualify for the ROZ credit, an individual must have Kansas source income of less than $10,000 in any one year for five or more years immediately prior to establishing their domicile in a rural opportunity zone in Kansas. If you have any Kansas source income in 2011, 2010, 2009, 2008, or 2007, list the amount on the appropriate line below.
If the amount of Kansas source income listed for any one of the years shown above exceeds $10,000, you do not qualify for the ROZ credit.

For More Information

If you have a question about the Department’s policies regarding the Rural Opportunity Zone program you can contact the Office of Policy and Research for more information. Submit your question to:
Office of Policy and Research
Kansas Department of Revenue
2nd Floor
Docking State Office Building
915 SW Harrison
Topeka, KS 66612
785-296-3081



Date Composed: 09/26/2011 Date Modified: 09/26/2011