Opinion Letter

Letter Number:O-2001-012
Tax Type:Corporate Income Tax
Brief Description:Calculation of the business and job development credits.
Keywords:
Approval Date:02/22/2001



Body:
Office of Policy & Research


February 22, 2001



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Dear XXXX:

Thank you for your letter regarding the calculation of the business and job development credit for XXXX.

K.S.A. 79-32,153(a) provides,
K.S.A. 79-32,160a(a) provides,
K.S.A. 79-32,154(b) provides the definition of qualified business facility as,
Facility is defined in K.S.A. 79-32,154(a) as,
K.S.A. 79-32,154(f) provides that commencement of commercial operations, K.S.A. 79-32,154(e) provides the definition of qualified business facility investment as, K.S.A.79-32,154(d) provides the definition of qualified business facility employee as, In the case of an investment in a qualified business facility that existed and was operated by the taxpayer prior to the investment, the calculation of qualified business facility investment and qualified business facility employees shall begin with the first month in the taxpayer’s taxable year. In the scenario you have presented, XXXX is on a calendar tax year. The calculation for both investment and employees would therefore begin in January 2000 and end in December 2000. Those figures would then be compared to the base tax year of 1999 (Jan-Dec).

Because of the way investment and employees are calculated (monthly average), a business that makes an investment and hires employees at the end of the year, may not qualify for the credit in the year the investment was made and became operational and employees were hired. However, if it maintains the new employees and investment in the next tax year, it should be eligible for the credit in that following year.

If I may be of further assistance, please contact me at your earliest convenience.

Sincerely,



Kathleen M. Smith
Tax Specialist, Office of Policy and Research


Date Composed: 02/23/2001 Date Modified: 10/10/2001