Notice

Notice Number:01-04
Tax Type:Kansas Retailers' Sales Tax
Brief Description:Sales Tax Increment Financing For Historic Theaters
Keywords:
Approval Date:08/24/2001


Body:
Office of Policy & Research

NOTICE 01-04
August 24, 2001

Sales Tax Increment Financing For Historic Theaters


K.S.A. 12-1770 et seq. is an act that deals with the development and redevelopment of areas in and around cities. The 1999 and 2000 Legislatures amended the act to allow cities to issue special obligation bonds to finance the restoration of historic theaters by use of sales tax increment financing. Under the act, the amount of state and local sales tax collected by taxpayers doing business within the historic theater that exceeds the amount of such taxes collected prior to the designation of the building as a historic theater is used to pay the principal and interest of the bonds.

Advice has been requested as to how the term “historic theater” is defined, what types of sales qualify for consideration as part of the sales tax increment, and how the baseline to be used for sales tax collected before the theater’s designation as a historic place should be calculated. As amended by the 2000 Legislature, K.S.A. 12-1770a provides:
The Department of Revenue has determined the term “historic theater,” as defined by K.S.A. 12-1770(a), includes only the building or buildings that was originally part of the theater. The current percentage of use of the building is immaterial. A building that was not originally part of the theater does not qualify as a “historic theater,” even though the building may currently be used to support the operation of the theater.

The sales tax revenue collected by a retailer doing business within a historic theater qualifies as part of the historic theater sales tax increment. Sales tax revenue includes all sales tax revenue collected by the business, including the sales tax collected on mail order, ticket, and similar types of sales. Sales tax revenue collected by a retailer business within a building that is not designated as a historic theater does not qualify as part of the sales tax increment.

The baseline to be used for sales tax collected before the theater’s designation as a historic theater shall be the fiscal year preceding the fiscal year in which the theater was designated a historic theater. The baseline amount must be met for each year after the theater’s designation as a historic theater before a sales tax increment can be calculated and allowed. Once the retailers who are doing business in the theater reach the baseline amount in their collections, the additional sales tax revenues collected will no longer go to the state general fund, but will be used for the purposes of the act.

TAXPAYER ASSISTANCE

To obtain additional copies of this or any other notice call the Kansas Department of Revenue’s voice mail forms request line at (785) 296-4937 or download them from our web site: www.ink.org/public/kdor. If you have any questions about this notice, please contact our Taxpayer Assistance Center.
Taxpayer Assistance Center
Docking State Office Building
915 SW Harrison St., 1st Floor
Topeka, KS 66625-0001
In Topeka call: 368-8222
Outside Topeka call toll free: 1-877-526-7738
Hearing Impaired TTY: 1-785-296-6461
Fax: (785) 291-3614







Issued: August 24, 2001




Date Composed: 08/23/2001 Date Modified: 10/10/2001