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 paid this years personal income tax on business machinery and equipment in a timely manner, you may claim this new credit on your Kansas income tax, privilege tax, or insurance company premiums tax return.
The credit is 15% of the personal property tax paid on qualified machinery and equipment.
"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 credit.
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 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:
To obtain Schedule K-64, call the Kansas Department of Revenue's voice mail forms request line at (785) 296-4937. For more information on this tax credit, please contact the Kansas Department of Revenue offices listed or visit their web site at http://www.ksrevenue.org/taxcredits-machinery.html. Contact your county officials for information or assistance in determining the amount of personal property taxes paid on commercial and industrial machinery and equipment.