Regional Foundation Credit
INCOME AND PRIVILEGE TAXPAYERS – Effective for all taxable years beginning after Dec. 31, 2003.
For taxable years beginning after Dec. 31, 2003, any taxpayer contributing to an approved regional foundation is allowed a tax credit against their tax liability. Contributions may be made through Dec. 31, 2012 at which time the credit will end.
A taxpayer must make a contribution to a regional foundation that demonstrates capacity to provide economic development services to regions. The regional foundation must be approved by the secretary of the Kansas Department of Commerce. You may download a list of the approved regional foundations here.
The credit amount shall not exceed 75 percent of the total contribution made during the taxable year to an approved regional foundation.
If the amount of credit exceeds the taxpayer’s tax liability, the excess amount shall be refunded to the taxpayer.
Limitation of Credit
The total amount of tax credits shall not exceed $2.5 million for fiscal year 2005 and 2006 and $2,000,000 per year for fiscal years 2007 through and including 2010 and 2012, and $1.8 million for fiscal year 2011.
Modification to Taxable Income
Any taxpayer taking advantage of this credit must make an addition on the Kansas return to their taxable income in the amount of the total contribution made, for the tax year in which the contribution was made.
Procedures to Claim the Credit
You may download Schedule K-32 to claim the regional foundation credit. This schedule must be completed and submitted with the income or privilege tax return. You may also call the Department of Revenue voice mail system at 785-296-4937 to request Schedule K-32. You will be asked to give your name, address, phone number and form(s) you desire. Please allow two weeks for delivery of your forms.
A taxpayer means:
- any business entity authorized to do business in the state of Kansas which is subject to the state income tax imposed by the provisions of the Kansas income tax act;
- any individual subject to the state income tax imposed by the provisions of the Kansas income tax act;
- any national banking association, state bank, trust company or savings and loan association paying an annual tax on its net income pursuant to article 11 of chapter 79 of the Kansas Statutes Annotated; or
- any insurance company paying the premium tax and privilege fees imposed pursuant to K.S.A. 40-252, and amendments thereto.
A contribution includes the donation of cash, services or property other than used clothing in an amount or value of $250 or more. Stocks and bonds contributed shall be valued at the stock market price on the date of transfer. Personal property items contributed shall be valued at the lesser of the item’s fair market value or cost to the donor and may be inclusive of costs incurred in making the contribution, but does not include sales tax. Contributions of real estate are allowable for credit only when title of such real estate is in fee simple absolute and is clear of any encumbrances. The amount of credit allowable shall be based upon the lesser of two current independent appraisals conducted by state licensed appraisers.
A regional foundation is any organization in Kansas that demonstrates capacity to provide economic development services to regions and:
- has obtained a ruling from the internal revenue service that such organization is exempt from income taxation under the provisions of section 501(c)(3) or 501(c)(6) of the federal internal revenue code;
- has been designated as a certified development company by the United States small business administration;
- has been designated as an economic development district by the United States department of commerce’s economic development administration;
- has been organized as a regional planning commission under K.S.A. 12-744 et seq., and amendments thereto, or its predecessor, K.S.A. 12-716 et seq., and amendments thereto; or
- is incorporated in the state of Kansas as a nonstock, nonprofit corporation.
A region means multi-county areas as defined by the Secretary of Commerce.