Disaster Credit Frequently Asked Questions

I am purchasing a business in one of the applicable cities.  Will this purchase of the business qualify for the declared disaster capital investment credit?
No, the actual acquisition of the business will not qualify.  If you need to make some improvements to the facility or wish to purchase some additional machinery and equipment, these types of expenditures would qualify.

I am purchasing a business in one of the applicable cities that will shut its doors without my stepping in.  Will this purchase of the business qualify for the declared disaster capital investment credit?
No, the actual acquisition of the business will not qualify.  If you need to make some improvements to the facility or wish to purchase some additional machinery and equipment, these types of expenditures would qualify.

A business in one of the applicable cities closed its doors last week.  I am contemplating the purchase of this business.  Will this purchase of the business qualify for the declared disaster capital investment credit?
The Kansas Department of Revenue will review these types of situations on a case by case basis.  With each scenario different facts will determine the outcome.  Factual situations should be submitted to the Department of Revenue for review.

My business facility is located in Iola, Kansas.  I entered into a lease agreement for the business machinery and equipment that I use in my business facility prior to the date of the occurrence of the major disaster declaration, or June 26, 2007.  Will the lease payments that I make for this business machinery and equipment after June 26, 2007 and before June 26, 2010 qualify for the declared disaster capital investment credit?
No.  Because your lease was entered into before the date of the occurrence of the major disaster declaration, these lease payments will not qualify for the credit.  If you should renew your lease during this time frame, these lease payments related to the renewal of the lease agreement will not qualify either.

This program has been put into place to encourage new investment in some of the communities hardest hit by the disasters.  Therefore, if you were to sign a new lease for new equipment during this time frame, those lease payments would qualify for the credit.

My business must make some improvements to our facility and some repairs to our machinery and equipment.  I will have my employees actually do the construction work on the facility and the labor to repair my machinery and equipment.  Will these labor services qualify for the declared disaster capital investment credit?
No.  Labor services to make improvements to your facility or to repair machinery and equipment at the facility for which your own employees are paid wages cannot qualify for the credit.

Because of the number of applications that were received by Nov. 30, 2008 and the amount of estimated expenditures reported, my pre-approved credit was 8 percent rather than 10 percent of the proposed investment.  Will there be an opportunity to receive that additional 2 percent at a later time?
Yes, it is possible if funding is available in one of the subsequent fiscal years.  The Department will notify you if funding is available.

May I electronically file my Kansas return claiming this credit?
Yes, in fact we encourage you to do so.  Filing electronically reduces our processing costs and enables the Department to process your return quickly.  At this time however, the Schedule K-87, Declared Disaster Capital Investment Credit cannot be part of the electronic file.  We ask that you file your tax return electronically and FAX your credit schedule to our office at 785-296-8989.  We will match your credit schedule to your tax return and process your information in record time.

Questions may directed to the Kansas Department of Revenue at 785-296-3070 or to kathleen.smith@kdor.ks.gov.