Questions and Answers
New income tax credit.
Corporate Income Tax; Individual Income Tax
New income tax credit available to business machinery and equipment owners.
New Income Tax Credit Available to Business MACHINERY AND EQUIPMENT Owners
The Kansas Tax Reduction and Reform Act of 1998 created an income tax credit for owners of machinery and equipment used in a business related activity. If you timely paid 1998 personal property tax on business machinery and equipment, you may claim this new tax credit on your Kansas income tax, privilege tax, or insurance company premiums tax return.
How much is the credit?
The credit is 15% of the personal property tax paid on qualified machinery and equipment.
What types of machinery and equipment qualify for the credit?
"Qualifying machinery and equipment" means machinery and equipment required to be listed for property taxation on Schedule 2, Schedule 5, or Schedule 6 by a for-profit business required to file an income tax, privilege tax, or insurance company premiums tax return.
Schedule 2 Property
-Prescribed and/or itemized machinery and equipment used in mineral leasehold interests, including diesel engines, drilling rigs, electric motors, line piping, mud pumps, water injection pumps, oil separators, oil well tubing pumps, pumping jacks, service units, and tanks.
Schedule 5 Property
-Commercial and industrial machinery and equipment including cash registers, computers, construction equipment, fixtures, furniture, gas pumps, manufacturing equipment, medical equipment, signs, trailers, and other tangible personal property used in a business.
Schedule 6 Property
-All other business-related tangible personal property not elsewhere classified, such as spare parts.
Items that DO NOT qualify for the credit include motor vehicles, personal property owned by a public utility, and property not used for a business purpose.
What taxes qualify for the 1998 credit?
For tax year 1998, only the 1998 personal property tax timely paid in 1998 may be used for this credit. The balance of your 1997 personal property tax paid in 1998, and any delinquent taxes do not qualify for the credit.
What taxes will qualify in future years?
For 1999 and subsequent tax years, the personal property tax timely paid in the tax year on business machinery and equipment is the basis for the credit. For example: For tax year 1999, you may use the last half of 1998 taxes paid by June 20, 1999, and also the 1999 taxes paid by December 20, 1999.
Who may take the credit?
Any business owner paying personal property tax on qualified machinery and equipment is eligible for the credit. This includes: sole proprietorships, partnerships, corporations, limited liability companies and others filing income tax returns; banks, savings and loans and trust companies filing privilege tax returns, and insurance companies paying the insurance company premiums tax.
How do I claim the credit?
Complete Schedule K-64, "Kansas Machinery and Equipment Tax Credit," and attach to your tax return along with a copy of your personal property tax receipt. If your paid receipt does not separate the tax paid on qualified property from other personal property taxes paid, you must also obtain a breakdown of the tax paid on qualifying personal property from the county.
To obtain Schedule K-64, call the Kansas Department of Revenue’s voice mail forms request line at (785) 296-4937. Contact your county officials for information or assistance in determining the amount of personal property taxes paid on commercial and industrial machinery and equipment.
For more information on this tax credit, contact any of the Kansas Department of Revenue offices listed below or visit our web site:
Topeka Assistance Center (785) 296-0222
Docking State Office Building
915 SW Harrison, 1st Floor
Topeka, KS 66612-1588
Metropolitan Assistance Center (913) 677-0158
Cloverleaf Office Park, Building 3
6405 Metcalf Ave., Suite 120
Overland Park, KS 66202-3928
Wichita Assistance Center (316) 337-6140
Finney State Office Building
230 E. William, Room 7150
Wichita, KS 67202-4002
Return to KSA Listing