Topeka – Kansas Governor Sam Brownback signed two pieces of legislation aimed at growing the state’s economy and getting unemployed Kansans back to work into law today during a signing ceremony at NetStandard, Inc. in Kansas City, Kansas.
Lt. Governor Jeff Colyer, M.D., Revenue Secretary Nick Jordan, several state legislators as well as a number of business owners joined the Governor at the bill signing. Among other modifications, Senate Bill 193 will expand the Promoting Employment Across Kansas (PEAK) program and make several changes in High Performance Incentive Program (HPIP) tax credits, including extending the carry-forward period from 10 to 16 years.
Senate Bill 196 will establish a new state income tax deduction known as “expensing” for certain qualified investments; repeal or phase out a number of existing state income tax credit and sales tax exemptions; repeal the Kansas Economic Opportunity Initiative Fund (KEOIF); and create a new fund, the Job Creation Program Fund (JCPF).
Governor Brownback praised both measures as pro-growth and pointed out SB 196 is unique to Kansas.
“Our number one priority is to grow the Kansas economy and get the more than 100,000 unemployed Kansans back to work. We face difficult economic times and high levels of unemployment,” Governor Brownback said. “This environment underscores the need to make Kansas more competitive in attracting jobs and businesses to the state. SB 196 makes Kansas the only state to offer an economic development incentive of this nature.”
SB 196 allows a business who makes a qualified capital investment to take a 100% deduction against income tax for the depreciation of the investment in the first year – instead of requiring a prescribed schedule of smaller deductions over multiple years.
“Governor Brownback and I campaigned on the promise to create private sector jobs. These important bills will spark investment and produce jobs,” Lt. Governor Colyer said. “Expensing, properly implemented, is a tax policy that treats all businesses equally.”
Kansas Revenue Secretary Nick Jordan also expressed his support for SB 196.
“This bill will encourage broad based economic growth by creating a uniform tax treatment for Kansas businesses of all sizes when they invest in equipment or software,” Secretary Jordan said. “When businesses – from small mom and pop stores on Main Street to large multinational corporations – get to keep more of their hard-earned money, we help them grow the economy and create more jobs.”
Kansas Commerce Secretary Pat George called the bill a major step toward expanding the Kansas economy and creating jobs.
“The Brownback Administration wants to enact tax policies that maximize economic growth, and the guiding principle has always been that every business, every innovation and every entrepreneur matters,” Secretary George said. “Expensing will result in uniform income tax treatment for capital investment in qualifying machinery and equipment by businesses of all types and sizes, which will encourage broad-based growth.”
NetStandard CEO Jeff Melcher said growing companies like his will benefit from the pro-growth legislation.
“The Job Creation and Business Investment Bill is particularly interesting to me because it includes small and mid-sized businesses such as NetStandard,” Melcher said. “Legislative changes like this continue to improve the business environment in Kansas allowing us to grow and create jobs.”
The recent federal tax package included one year of full expensing. The Kansas expensing proposal goes into effect after the expiration of the federal program. The law allows businesses to reinvest up to $50 million a year.