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Aggressive incentives to support growth

  • State of Kansas Incentive
    • Promoting Employment Across Kansas (PEAK)
       
    • This program offers qualified companies the ability to retain 95 percent of their payroll withholding tax for up to seven years. PEAK is available for new operations in Kansas as well as relocated operations to the state.
    • In 2013, it will be available for qualifying business retention projects as well. Companies need to create at least 10 new jobs within two years in metropolitan areas or five new jobs within two years in all other counties of the state. High-impact projects that create 100 new jobs within two years can retain 95 percent of payroll withholding tax for up to a period of 10 years.
    • The number of years that the withholding tax can be retained depends on how much the annual median or average wage of the jobs at the Kansas worksite will exceed the current county median wage and the discretion of the Secretary of the Kansas Department of Commerce. A PEAK application must be submitted before locating or creating PEAK-eligible jobs in Kansas.
  • Machinery & Equipment Expense Deduction
  • Eligible Kansas taxpayers are allowed to claim an expense deduction for business machinery and equipment, placed into service in Kansas. This is a one-time deduction for each qualified purchase of machinery and equipment in the year that it is placed in service. Unused expense deduction is treated as a Kansas net operating loss that may be carried forward for 10 years. Eligible investment is machinery and equipment depreciable under the Modified Accelerated Cost Recovery System (MACRS) in section 168 of the Internal Revenue Code, or canned software as defined in section 197 of the Internal Revenue Code. Examples of eligible equipment include manufacturing equipment, office furniture, computers, software and racking.

    • Tax Credits

    • High Performance Incentive Program (HPIP)-

      This program provides a 10 percent corporate income tax credit on the qualified capital investment of an eligible company. Qualified capital investment can include such items as the purchase or lease of a facility or equipment, remodeling or build-out costs, fixtures, furniture and computers. Equipment transferred to Kansas from out-of-state is also credited at the original acquisition cost. The 10 percent tax credit is awarded to companies that operate an eligible business, pay above-average wages and invest in employee training. The credits can be used to significantly reduce a company's corporate income tax liability in a given year. Credits must be used within a consecutive 16-year period. The minimum investment threshold to qualify for HPIP is $1 million for the urban counties of Douglas, Johnson, Sedgwick, Shawnee and Wyandotte. For all other counties, the minimum investment threshold is $50,000. A key component of HPIP is the completion of the Project Description form, which must be submitted to the Department of Commerce prior to the company signing any document, such as a lease or purchase agreement, which commits the company to locating or expanding in Kansas.

    • Research Tax Credit-

      Kansas offers an incometax credit equal to 6.5 percent of a company's investment in research and development above the average expenditure of the previous three-year period. Twenty-five percent of the allowable annual credit may be claimed in any one year.

    • Work Opportunity Tax Credits-The Work Opportunity Tax Credit (WOTC) and Welfare-to-Work tax credit are federal income tax credits that encourage employers to hire job seekers who face the greatest barriers to employment.  Federal tax credit up to $2400 per qualified hire.

    • Tax Exemptions-Kansas offers several tax exemption programs:
      • Inventory Property Tax-Kansas has no inventory property tax
      • Commercial/Industrial Personal Property Tax-Kansas exempts all commercial, industrial, telecommunications, and railroad machinery and equipment  purchased or leased
      • Consumed in Production Sales Tax-Kansas exempts sales tax for items that are consumed in production
      • Utilities Sales Tax-Kansas exempts sales tax on any utilities (electric, gas, water, sewer) used in a production process.
      • Ingredient or Component Part Sales Tax-Kansas exempts sales tax on items that become part of a finished product to be sold to the final consumer
      • Integrated Production Machinery and Equipment Sales Tax-Kansas exempts sales tax on all machinery and equipment used directly and primarily for the purpose of manufacturing (all aspects), warehousing/distribution
    • Workforce Development-Kansas offers several programs to provide training for workforce development
      • Kansas Industrial Training (KIT)-Grant program designed to provide funds for a new or expanding business to offset qualifying training costs.  Maximum award of $2000/employee
      • Kansas Industrial Retraining (KIR)-Grant program designed to provide funds to retrain existing employees likely to be displaced due to obsolete or inadequate training.  Grant will offset up to half of the eligible training costs.  Maximum award of $2000/employee.

State of Kansas incentives are based on qualifying factors, determined by the scope of the project.  Values of the various incentives are formula generated, the greater the capital investment, job creation, and/or wage level, the higher the incentive value.  Certain program benefits may exclude the use of other programs.  The State of Kansas will work with a project to determine the best combination of incentives, based on the scope of the project. 

  • Saline County/City of Salina Incentives
    • Industrial Revenue Bonds (IRB)-The City of Salina may facilitate the use of industrial revenue bonds to finance the land acquisition and construction of a new facility
    • Tax Increment Financing (TIF)-The City of Salina may facilitate the creation of a tax increment financing district, for the purpose of financing land acquisition and the construction of a new facility
    • Property Tax Abatement-The City of Salina may offer property tax abatement for a qualifying new facility.  The terms of the abatement depend on the scope of the project, up to a 10 year/100% abatement.
    • Salina Economic Development Incentive Council (SEDIC)-The City of Salina may offer SEDIC grants, to be used for training, or for qualified capital investment purchases, such as buildings or equipment

The City of Salina is committed to working with prospective companies to insure their relocation to Salina is executed in a timely and efficient manner.  Incentive levels offered to a prospect depend on the scope of the project.