Revenue Ruling

Ruling Number:12-1998-03
Tax Type:Corporate Income Tax; Individual Income Tax
Brief Description:Business and job development credits.
Keywords:
Approval Date:11/23/1998


Body:
REVENUE RULING 12-1998-03

November 23, 1998

Issue: Must a business reinstate employees to the numbers originally qualifying them for a previously claimed business and job development credit before claiming a new business and job development credit?


Relevant statutes: K.S.A. 79-32,153 and 79-32,154


The purpose of this revenue ruling is to clarify that taxpayers are not required to reinstate employees to an original level of employment before claiming a new business and job development credit. This ruling addresses the job expansion aspect of the business and job development credit. It references the investment portion only where it will help explain the situation.

K.S.A. 79-32,153 allows for a business and job development credit to be claimed for a period of ten years. A taxpayer who invests in a “qualified business facility,” and hires at least two “qualified business facility employees” over and above the base period, for work at such facility as a direct result of its investment in such facility, is entitled to claim a credit in the year in which the investment is made. In order to continue to claim the credit in each of the following nine years, at least two of these qualified business facility employees must be maintained at such facility.

To illustrate the application of this ruling it is best to walk through a scenario.

A taxpayer who invests in a qualified business facility and hires at least two qualified business facility employees over and above the base period for work at such facility as a direct result of the investment in such facility is entitled to claim a business and job development credit. Two employees must be maintained at such facility to enable the taxpayer to continue to claim the credit in the following nine years. The credit must be recomputed each year the credit is claimed. Once a taxpayer does not maintain at least two of the qualified business facility employees at such facility for that specific credit, that credit stops.

Taxpayers may file an amended return within three years from the date the original return was due and actually filed. If the original return was filed after the due date, a refund claim must be filed not later than three years from the time the return was actually filed, or two years from the date the tax was paid, whichever of the period expires later.


________________________
Karla Pierce
Acting Secretary of Revenue


Date Composed: 12/03/1998 Date Modified: 10/11/2001