There are seven Kansas Regional Foundations that are certified by the Kansas Department of Commerce to receive Rural Business Development Tax Credits. All 105 counties are covered by one of these foundations. Tax credits are offered to foundations for use in raising capital for local economic development initiatives.
Rural Business Development Tax Credit Program
The Rural Business Development Tax Credit provides an innovative way to benefit start-up and existing business in Kansas, while simultaneously providing tax benefits to donors. The Kansas Economic Development Act of 2005 initiated the Rural Business Development Tax Credit Program (SB 453). Under this program $2,000,000 in state tax credits are allocated each year toward rural economic development. These tax credits generate donations that in turn are used to fund economic development projects, provide support and offer financial assistance to rural businesses throughout the state. Sixty percent of the generated funds must be used toward activities that help to create or retain jobs. Eligible uses for the funds include:
1) Business Startups
2) Business Expansion
3) Business Retention
4) Business Support Services
5) Regional Leadership Development
6) Technology Improvements
7) Administrative Services (not to exceed 10%)
The $2,000,000 in state tax credits are distributed equally to seven regional foundations. These foundations solicit donations from businesses, banks and individuals. Donations are eligible for a seventy-five percent credit toward Kansas state tax liability. This means that a donation of $10,000 to a regional foundation with available tax credits is eligible for a $7,500 credit against Kansas state tax liability (individual, business or privilege). Additionally, the donation still maintains eligibility for an itemized Federal tax deduction as a charitable contribution. The percentage of the Federal deduction varies with the tax bracket of the filer. For the year of their donation, donors will need to file a K-32 to claim the credit.
General questions regarding the Rural Business Development Tax Credit Program can be directed to the Kansas Department of Commerce’s Rural Development Division at: (785)-296-3485.
To make a donation or seek available services in your region, please contact the regional foundations directly.