Kansas Tax Incentives
Biofuel Equipment Tax Credits
A Storage and Blending Equipment Credit is available for tax years 2007 through 2011 for investment in the purchase, construction, or installation of equipment used for storing and blending petroleum-based fuel with biodiesel, ethanol, or other biofuel. The tax credit is equal to 10% of the taxpayer's qualified investment for the first $10,000,000 invested and 5% of the investment in excess of $10,000,000. The credit may be taken in 10 equal annual installments beginning with the year in which the equipment is placed into service. Any excess credits may be carried over for deduction from the taxpayer's income tax liability in subsequent years for a maximum of 14 years after the first installment. In order to be eligible for the tax credit, the taxpayer must continue to operate the equipment for at least 10 years.
Biofuel blenders may also be eligible for an income tax deduction based on the accelerated depreciation for storage and blending equipment. This deduction extends over a 10-year period and is equal to 55% of the depreciated value for the first year and 5% of the depreciated value for each of the nine subsequent years that the equipment remains in production.(Reference Kansas Statutes 79-232 and 79-32,251 - 79-32,255)Cellulosic Ethanol Production Incentive
The Kansas Development Finance Authority (KDFA) is authorized to issue revenue bonds to cover the costs of construction or expansion of a biomass-to-energy facility. A qualifying biomass-to-energy facility includes any industrial process plant that produces at least 500,000 gallons of cellulosic alcohol fuel, liquid or gaseous fuel, or other source of energy in a quantity having a British thermal unit (BTU) value equal to, or greater than, 500,000 gallons of cellulosic alcohol fuel. In addition, any newly constructed or expanded biomass-to-energy facility is exempt from state property taxes for a period of up to 10 taxable years immediately following the taxable year in which construction or installation is completed. Expansion of an existing biomass-to-energy facility means expansion of the facility's production capacity by a minimum of 10%. (Reference Kansas Statutes 74-8949b, 79-32,233, and 79-229)
Renewable Fuel Retailer Incentive
A licensed retail motor fuel dealer may receive a quarterly incentive for selling and dispensing renewable fuels, including biodiesel. Qualified motor fuel dealers are eligible for up to $0.065 for every gallon of renewable fuel sold and up to $0.03 for every gallon of biodiesel sold, if the required threshold percentage is met. The threshold percentage for the incentive payment will increase on an annual incremental basis from 10% for renewable fuel and 2% for biodiesel in 2009 to 25% for each fuel type beginning on January 1, 2024. This incentive is currently on hold until further notice. (Reference Kansas Statutes 79-34, 171 through 79-34, 176)
Point of Contact
Cindy Mongold
Public Service Administrator II
Kansas Department of Revenue
Phone (785) 296-7048
Fax (785) 296-4993
cindy_mongold@kdor.state.ks.us
http://www.ksrevenue.org
Alternative Fuel Vehicle (AFV) Tax Credit
The state offers an income tax credit worth up to 40% of the incremental or conversion cost for qualified AFVs placed into service after January 1, 2005, as outlined in the table below. Qualified AFVs include vehicles that operate on a combustible liquid derived from grain starch, oil seed, animal fat, or other biomass, or produced from a biogas source.
| GVWR | Credit |
|---|---|
| Less than 10,000 pounds (lbs.) | Up to $2,400 |
| 10,000 to 26,000 lbs. | Up to $4,000 |
| Over 26,000 lbs. | Up to $40,000 |
(Reference Kansas Statutes 79-32,201)
Point of Contact
Ray Hammarlund
Kansas Energy Office
Phone (785) 271-3179
Fax (785) 271-3268
r.hammarlund@kcc.ks.gov
http://www.ksrevenue.org/taxcredits-altfuel.htm
Alternative Fueling Infrastructure Tax Credit
The state offers an income tax credit for alternative fueling stations placed into service after January 1, 2009. The tax credit, worth up to 40% of the total costs, may not exceed $100,000. This tax credit must be deducted from the taxpayer's income tax liability for the taxable year in which the expenditures are made. In the event the credit is more than the taxpayer's tax liability for that year, the remaining credit may be carried over for up to three years after the year in which the expenditures were made. (Reference Kansas Statutes 79-32,201)
Point of Contact
Ray Hammarlund
Kansas Energy Office
Phone (785) 271-3179
Fax (785) 271-3268
r.hammarlund@kcc.ks.gov
http://www.ksrevenue.org/taxcredits-altfuel.htm
Ethanol Production Incentive
The Kansas Qualified Agricultural Ethyl Alcohol Producer Fund enables qualified agricultural ethyl alcohol (ethanol) producers to apply for a production incentive with the state Department of Revenue. If an ethanol producer who was in production prior to July 1, 2001 increases production capacity by 5,000,000 gallons over the producer's base sales, $0.075 may be collected for each gallon sold to an alcohol blender that is in excess of the producer's base sales, up to 15,000,000 gallons. Producers who began production on or after July 1, 2001, and who have sold at least 5,000,000 gallons to an alcohol blender may receive $0.075 for each gallon sold, up to 15,000,000 gallons. A producer may not collect the incentive for more than seven years. (Reference Kansas Statutes 79-34,163)
Point of Contact
Patricia Platt
Public Service Administrator II
Kansas Department of Revenue
Phone (785) 291-3670
Fax (785) 296-2703
patricia_platt@kdor.state.ks.us
