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Session of 2026
SENATE BILL No. 536
By Committee on Assessment and Taxation
3-16
AN ACT concerning income taxation; relating to the high performance tax
credit program; providing for a rebate instead of a credit and capping
the maximum rebate provided; amending K.S.A. 2025 Supp. 79-
32,160a and repealing the existing section.
Be it enacted by the Legislature of the State of Kansas:
Section 1. K.S.A. 2025 Supp. 79-32,160a is hereby amended to read
as follows: 79-32,160a. (a) For taxable years commencing after December
31, 1999, and before January 1, 2012, any taxpayer who shall invest in a
qualified business facility, as defined in K.S.A. 79-32,154(b), and
amendments thereto, and effective for tax years commencing after
December 31, 2010, and before January 1, 2012, located in an area other
than a metropolitan county as defined in either K.S.A. 74-50,114 or 74-
50,211, and amendments thereto, and also meets the definition of a
business in K.S.A. 74-50,114(b), and amendments thereto, shall be
allowed a credit for such investment, in an amount determined under
subsection (b) or (c), as the case requires, against the tax imposed by the
Kansas income tax act or where the qualified business facility is the
principal place from which the trade or business of the taxpayer is directed
or managed and the facility has facilitated the creation of at least 20 new
full-time positions, against the premium tax or privilege fees imposed
pursuant to K.S.A. 40-252, and amendments thereto, or as measured by the
net income of financial institutions imposed pursuant to article 11 of
chapter 79 of the Kansas Statutes Annotated, and amendments thereto, for
the taxable year during which commencement of commercial operations,
as defined in K.S.A. 79-32,154(f), and amendments thereto, occurs at such
qualified business facility. In the case of a taxpayer who meets the
definition of a manufacturing business in K.S.A. 74-50,114(d), and
amendments thereto, no credit shall be allowed under this section unless
the number of qualified business facility employees, as determined under
K.S.A. 79-32,154(d), and amendments thereto, engaged or maintained in
employment at the qualified business facility as a direct result of the
investment by the taxpayer for the taxable year for which the credit is
claimed equals or exceeds two. In the case of a taxpayer who meets the
definition of a nonmanufacturing business in K.S.A. 74-50,114(f), and
amendments thereto, no credit shall be allowed under this section unless
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the number of qualified business facility employees, as determined under
K.S.A. 79-32,154(d), and amendments thereto, engaged or maintained in
employment at the qualified business facility as a direct result of the
investment by the taxpayer for the taxable year for which the credit is
claimed equals or exceeds five. Where an employee performs services for
the taxpayer outside the qualified business facility, the employee shall be
considered engaged or maintained in employment at the qualified business
facility if: (1) The employee's service performed outside the qualified
business facility is incidental to the employee's service inside the qualified
business facility; or (2) the base of operations or, the place from which the
service is directed or controlled, is at the qualified business facility. No
credits shall be allowed for any investments made pursuant to this
subsection on and after January 1, 2027.
(b) The credit allowed by subsection (a) for any taxpayer who invests
in a qualified business facility that is located in a designated
nonmetropolitan region established under K.S.A. 74-50,116, and
amendments thereto, on or after the effective date of this act, shall be a
portion of the income tax imposed by the Kansas income tax act on the
taxpayer's Kansas taxable income, the premium tax or privilege fees
imposed pursuant to K.S.A. 40-252, and amendments thereto, or the
privilege tax as measured by the net income of financial institutions
imposed pursuant to article 11 of chapter 79 of the Kansas Statutes
Annotated, and amendments thereto, for the taxable year for which such
credit is allowed, but in the case where the qualified business facility
investment was made prior to January 1, 1996, not in excess of 50% of
such tax. Such portion shall be an amount equal to the sum of the
following:
(1) $2,500 for each qualified business facility employee determined
under K.S.A. 79-32,154, and amendments thereto; plus
(2) $1,000 for each $100,000, or major fraction thereof, which shall
be deemed to be 51% or more, in qualified business facility investment, as
determined under K.S.A. 79-32,154, and amendments thereto.
No credits shall be allowed for any investments made pursuant to this
subsection on and after January 1, 2027.
(c) The credit allowed by subsection (a) for any taxpayer who invests
in a qualified business facility that is not located in a nonmetropolitan
region established under K.S.A. 74-50,116, and amendments thereto, and
effective for tax years commencing after December 31, 2010, and before
January 1, 2012, located in an area other than a metropolitan county as
defined in either K.S.A. 74-50,114 or 74-50,211, and amendments thereto,
and that also meets the definition of business in K.S.A. 74-50,114(b), and
amendments thereto, on or after the effective date of this act, shall be a
portion of the income tax imposed by the Kansas income tax act on the
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taxpayer's Kansas taxable income, the premium tax or privilege fees
imposed pursuant to K.S.A. 40-252, and amendments thereto, or the
privilege tax as measured by the net income of financial institutions
imposed pursuant to article 11 of chapter 79 of the Kansas Statutes
Annotated, and amendments thereto, for the taxable year for which such
credit is allowed, but in the case where the qualified business facility
investment was made prior to January 1, 1996, not in excess of 50% of
such tax. Such portion shall be an amount equal to the sum of the
following:
(1) $1,500 for each qualified business facility employee as
determined under K.S.A. 79-32,154, and amendments thereto; and
(2) $1,000 for each $100,000, or major fraction thereof, which shall
be deemed to be 51% or more, in qualified business facility investment as
determined under K.S.A. 79-32,154, and amendments thereto.
No credits shall be allowed for any investments made pursuant to this
subsection on and after January 1, 2027.
(d) The credit allowed by subsection (a) for each qualified business
facility employee and for qualified business facility investment shall be a
one-time credit. If the amount of the credit allowed under subsection (a)
exceeds the tax imposed by the Kansas income tax act on the taxpayer's
Kansas taxable income, the premium tax and privilege fees imposed
pursuant to K.S.A. 40-252, and amendments thereto, or the privilege tax as
measured by the net income of financial institutions imposed pursuant to
article 11 of chapter 79 of the Kansas Statutes Annotated, and amendments
thereto, for the taxable year, or in the case where the qualified business
facility investment was made prior to January 1, 1996, 50% of such tax
imposed upon the amount which exceeds such tax liability or such portion
thereof may be carried over for credit in the same manner in the
succeeding taxable years until the total amount of such credit is used.
Except that, before the credit is allowed, a taxpayer, who meets the
definition of a manufacturing business in K.S.A. 74-50,114(d), and
amendments thereto, shall recertify annually that the net increase of a
minimum of two qualified business facility employees has continued to be
maintained and a taxpayer, who meets the definition of a
nonmanufacturing business in K.S.A. 74-50,114(f), and amendments
thereto, shall recertify annually that the net increase of a minimum of five
qualified business employees has continued to be maintained.
(e) Notwithstanding the foregoing provisions of this section, and
except as otherwise provided in this subsection, any taxpayer qualified and
certified under the provisions of K.S.A. 74-50,131, and amendments
thereto, that prior to making a commitment to invest in a qualified Kansas
business, has filed a certificate of intent to invest in a qualified business
facility in a form satisfactory to the secretary of commerce, shall be
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entitled to a credit in an amount equal to 10% of that portion of the
qualified business facility investment that exceeds $50,000 in lieu of the
credit provided in subsection (b)(2) or (c)(2) without regard to the number
of qualified business facility employees engaged or maintained in
employment at the qualified business facility. For tax years beginning on
or after January 1, 2012, for a qualified business facility investment in
Douglas, Johnson, Sedgwick, Shawnee or Wyandotte county, such credit
shall be in an amount equal to 10% of that portion of the qualified business
facility investment that exceeds $1,000,000. Any taxpayer who has filed a
certificate of intent to invest in a qualified business facility pursuant to this
subsection in Douglas, Johnson, Sedgwick, Shawnee or Wyandotte county
prior to December 31, 2011, and commences investments in a qualified
business facility prior to December 31, 2013, may claim credits under
K.S.A. 74-50,131, 74-50,132 and 79-32,160a(e), and amendments thereto,
in an amount equal to 10% of that portion of the qualified business facility
investment that exceeds $50,000. Timing modifications may be authorized
at the discretion of the secretary of commerce and the secretary of revenue
during the transition period. The credit allowed by this subsection shall be
a one-time credit. If the amount thereof exceeds the tax imposed by the
Kansas income tax act on the taxpayer's Kansas taxable income or the
premium tax or privilege fees imposed pursuant to K.S.A. 40-252, and
amendments thereto, or the privilege tax as measured by net income of
financial institutions imposed pursuant to article 11 of chapter 79 of the
Kansas Statutes Annotated, and amendments thereto, for the taxable year,
the amount thereof that exceeds such tax liability may be carried forward
for credit in the succeeding taxable year or years until the total amount of
the tax credit is used, except that no such tax credit shall be carried
forward for deduction after the 16 th taxable year succeeding the taxable
year in which such credit initially was claimed, and no carryforward shall
be allowed for deduction in any succeeding taxable year unless the
taxpayer certifies under oath that the taxpayer continues to meet the
requirements of K.S.A. 74-50,131, and amendments thereto, and this act.
In no event shall any credit allowed under this section that expired during
any taxable year prior to the taxable year commencing January 1, 2011, be
revived under the provisions of this act.
(f) For projects placed into service on and after January 1, 2021, a
taxpayer may transfer up to 50% of the tax credit allowed under subsection
(e), as provided in this subsection. The taxpayer may make a transfer to
one or more transferees, but the total of all transfers shall not exceed 50%
of the taxpayer's tax credit. The taxpayer shall make the transfer or
transfers within a single tax year. The credit may be transferred to any
individual or entity and shall be claimed in the year the credit was
transferred against the transferee's tax liability for the income tax under the
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Kansas income tax act or the premium tax or privilege fees imposed
pursuant to K.S.A. 40-252, and amendments thereto, or the privilege tax as
measured by the net income of financial institutions imposed pursuant to
article 11 of chapter 79 of the Kansas Statutes Annotated, and amendments
thereto. The amount of the credit that exceeds the transferee's tax liability
for such year may be carried forward for credit in the succeeding taxable
year or years until the total amount of the tax credit is used, except that no
such credit shall be carried forward for deduction after the 16 th taxable
year succeeding the taxable year in which such credit was initially
claimed. The taxpayer or transferee shall provide such documentation of
the tax credit transfer to the secretary of revenue as may be required by the
secretary.
(g) In the event the tax credit earned by the taxpayer and transferred
to a transferee is later disallowed in whole or in part by the secretary of
revenue, the taxpayer that originally earned the tax credit shall be liable for
repayment to the state in the amount disallowed.
(h) For tax years commencing after December 31, 2005, any taxpayer
claiming credits pursuant to this section, as a condition for claiming and
qualifying for such credits, shall provide information pursuant to K.S.A.
79-32,243, and amendments thereto, as part of the tax return in which such
credits are claimed. Such credits shall not be denied solely on the basis of
the contents of the information provided by the taxpayer pursuant to
K.S.A. 79-32,243, and amendments thereto.
(i) On and after January 1, 2027, the department of commerce shall
issue a rebate for an amount not to exceed 5% of the investment that
would have otherwise qualified for a tax credit pursuant to this section.
The rebate amount issued shall be paid out over 5 years in equal payments
of 1/5 of the issued rebate amount each year. The taxpayer shall be eligible
for the annual rebate payment until the qualified rebate amount is paid in
full, except that the rebate shall discontinue if the business eligible for the
rebate ceased operations or was sold in the tax year and no further
rebates shall be issued. The rebate shall not be transferable. The rebate
shall be issued by the department between January 1 and April 15 of the
year following the year in which the entity would have otherwise qualified
for the tax credit. Any individual project that would have qualified for a
tax credit shall not receive a rebate of more than $5,000,000 for each
qualifying project.
(j) This section and K.S.A. 79-32,160b, and amendments thereto,
shall be a part of and supplemental to the job expansion and investment
credit act of 1976, and amendments thereto.
Sec. 2. K.S.A. 2025 Supp. 79-32,160a is hereby repealed.
Sec. 3. This act shall take effect and be in force from and after its
publication in the statute book.
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