Income Tax Credit
New Income Tax Credit
There is a new Income Tax Credit available to business machinery and equipment owners. 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 year's 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.
- How much is the new income tax credit available to business machinery and equipment owners?
The credit is 15% of the personal property tax paid on qualified machinery and equipment.
- What types of machinery and equipment qualify for the credit?
"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.