Kansas Business and Job Development Credit

Business and Job Development Credit
Business and Job Development Credit K-34 (Rev. 8-11)
K-34

190301

KANSAS

BUSINESS AND JOB DEVELOPMENT CREDIT

(Rev. 8-19)

For the taxable year beginning, _________________ , 20____ ; ending _________________ , 20____ .
Name of taxpayer (as shown on return)

Social Security Number or Employer ID Number (EIN)

If partner, shareholder or member, enter name of partnership, S corporation, LLC or LLP

Employer ID Number (EIN)

PART A – DESCRIPTION OF QUALIFIED BUSINESS FACILITY
1. Name of legal entity making investment: ___________________________________

EIN: ____________________________

2. Location of qualified business facility:
a. Street Address ________________________________________________________________________________________
b. City

__________________________________ County No. _______________

County Name ______________________

c. NAICS __________________________________
3. Date operation began at this qualified business facility (mm/dd/yyyy):

___ ___ ___ ___ ___ ___ ___ ___

4. Indicate the type of business activity conducted at this facility (check appropriate box):

ˆ
ˆ
ˆ
ˆ

Retail or Service
Manufacturer
Contractor - Retailer
Contractor - Nonmanufacturer

ˆ
ˆ
ˆ
ˆ

Nonmanufacturer - Regular
Nonmanufacturer - Business Headquarters
Nonmanufacturer - Ancillary Support
Nonmanufacturer - NAICS 45411_____, 511210_____, 711212_____ (auto racetracks only)

5. Please check the box that best describes the type of qualified investment made at this facility:

ˆ
ˆ
ˆ
ˆ
ˆ
ˆ

New facility
Investment or expansion at an existing facility
Move from old Kansas location to new Kansas location
Move from out of state to new location in Kansas
Other: ______________________________________________________________________________________________
No new investment (for recomputing credits)

6. Date of investment made during the tax year for the qualified business facility (mm/dd/yyyy): ___ ___ ___ ___ ___ ___ ___ ___
7. Attach description of the investment made (see instructions).

PART B – COMPUTATION OF CREDIT

(a)
Retail or Service
8a. Number of qualified business facility employees ..........................
8b. Total Kansas payroll for employees identified on line 8a ...............
9. Qualified business facility employee credit ...................................
10. Qualified business facility investment ...........................................
11. Qualified business facility credit factor .........................................
12. Qualified business facility investment credit .................................
13. Total credit or prior year’s carry forward (must complete worksheet ) .......
14. Amount of credit used ...................................................................
15. Carry forward amount (must complete worksheet) ....................................
Retail or Service

______________________________
______________________________
______________________________
______________________________
______________________________
______________________________
______________________________

16. Qualified business facility income (attach schedule) ....................

______________________________

17. Tax on qualified business facility income (must complete worksheet) ........
18. Business and job credit limitation (50%) ........................................
19. Business and job development credit ............................................
Shareholder or Partner (attach schedules)
20. Ownership percentage .................................................................
21. Shareholder or partner amount of credit .......................................
22. Shareholder or partner Kansas tax liability (must complete worksheet) .....
23. Amount of credit used ...................................................................
24. Carry forward amount (must complete worksheet) ....................................
Payroll Information
A. Total employment in the state of Kansas .......................................
B. Total payroll in the state of Kansas ...............................................

______________________________
______________________________
______________________________


(b)
Manufacture / Nonmanufacturer
_____________________________

_____________________________

_____________________________

_____________________________

_____________________________

_____________________________

_____________________________

_____________________________

_____________________________


ˆ

I would like to defer this

credit to __ __ __ __ .
(not to exceed 3 years)


______________________________
______________________________
______________________________
______________________________

_____________________________

_____________________________

_____________________________
_____________________________

_____________________________


______________________________
______________________________

_____________________________

_____________________________


190302
Name ___________________________

EIN _______________

Location _________________________________

PART C – DETERMINING QUALIFIED EMPLOYEES AND CREDIT (see instructions for available credit amounts)
(A)
Month

(B)

(C)

(D)

(E)

(F)

Year End Date: __ __ __ __

Year End Date: __ __ __ __

Year End Date: __ __ __ __

Year End Date: __ __ __ __

Year End Date: __ __ __ __

Number of Base Employees

Number of Employees

Number of Employees

Number of Employees

Number of Employees

25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.

Total No. of Employees

38.

Average Employees

39.

Base Employees

40.

Qualified Employees

41.

Decrease in Employees

42.

Adjusted Employees

43.

TOTAL Employee Credit

PART D – DETERMINING QUALIFIED INVESTMENT AND CREDIT (see instructions for available credit amounts)
(A)

Month

(B)

(C)

(D)

(E)

(F)

Year End Date: __ __ __ __

Year End Date: __ __ __ __

Year End Date: __ __ __ __

Year End Date: __ __ __ __

Year End Date: __ __ __ __

Monthly Base Investment

Monthly Investment

Monthly Investment

Monthly Investment

Monthly Investment

44.
45.
46.
47.
48.
49.
50.
51.
52.
53.
54.
55.
56. Total Monthly Investment
57. Average Investment
58. Capitalized Rents
59. Total Investment
60. Base Investment
61. Increase in investment
62. Nonrelated Investment
63. Avg. Qualified Investment
64. Decrease in Investment
65. Adjusted Investment
66. Investment Credit Factor
67. TOTAL Investment Credit
68. TOTAL Credit
69. Credit Used
70.

Carry Forward

2


190303
Name ___________________________

EIN _______________

Location _________________________________

PART C – (continued)
(G)

(H)

(I)

(J)

(K)

(L)

Year End Date: __ __ __ __

Year End Date: __ __ __ __

Year End Date: __ __ __ __

Year End Date: __ __ __ __

Year End Date: __ __ __ __

Year End Date: __ __ __ __

Number of Employees

Number of Employees

Number of Employees

Number of Employees

Number of Employees

Number of Employees

25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.

PART D – (continued)
(G)
Year End Date: __ __ __ __
Monthly Investment

(H)
Year End Date: __ __ __ __
Monthly Investment

(I)

(J)

(K)

Year End Date: __ __ __ __

Year End Date: __ __ __ __

Year End Date: __ __ __ __

Year End Date: __ __ __ __

Monthly Investment

Monthly Investment

Monthly Investment

Monthly Investment

44.
45.
46.
47.
48.
49.
50.
51.
52.
53.
54.
55.
56.
57.
58.
59.
60.
61.
62.
63.
64.
65.
66.
67.
68.
69.
70.

3

(L)

K-120 FILERS: EXAMPLE FOR LINE 16 and 17 OF SCHEDULE K-34
This example was created for businesses that are unable to determine their exact property and payroll factors. You
will need to complete a property and payroll factor for each credit. If inventory is included in the numerator, then it must
be included in the denominator.

PROPERTY FACTOR:
Investment in New Business Facility

Average Inventory & Allocation Ratio


$

115,737.00 Line 65 – Part D (original year)
0 .00

$

Total Qualifying Kansas Property


115,737.00

E
L
P
M
A
X
E
$

9,417,250.00
4,330,710.00
$ 13,747,960.00
50 %
$	 6,873,980.00
4,842,928.00

Kansas Beginning Property (Current Year)

Kansas Ending Property (Current Year)

Total Property

Multiply by 50%

Average Property

Total Rents in Kansas X 8 (Current Year)


$11,716,908.00

Total Average Kansas Property


0.9878%

Property Factor

(Total qualifying Kansas
property divided by total average Kansas property)

PAYROLL FACTOR:

$

5,461,204.00
188
$
29,049.00


Total Kansas wages (Current Year)

Divide by Kansas Employees (Current Year)

Average Kansas Salary (Current Year)

Multiply by Number of Qualified Business

Facility Employees

11

Line 40 – Part C (original year)

$
319,539.00
$ 5,461,204.00

Total Facility Wages

Total Kansas Wages (Current Year)


5.8511%

Payroll Factor

Property Factor
Payroll Factor
Total Percent
Divide by 2
Average Percent

0.9878
5.8500
6.8389
2
3.4195

%
%
%
%

Kansas Taxable Income (Current Year)

$

271,184,00	 K-120: Line 20, Kansas Taxable Income
K-121: Line 19, Combined Report Income

$

Allocated Qualified Business Income
Tax on Total Kansas Taxable Income (Current Year) $

9,273.14 K-34: Line 16

18,257.00 K-120: Line 23, Total Tax
K-121: Line 22, Total Tax

Multiply by Average Percent

3.4195 %

Tax on Qualified Business Income

$

4

625.00 K-34: Line 17

K120S FILERS: EXAMPLE FOR LINE 16 OF THE SCHEDULE K-34

(Individuals see next page)

This example was created for business’ that are unable to determine their exact property and payroll factors. You will
need to complete a property and payroll factor for each credit. If inventory is included in the numerator then it must be
included in denominator.

PROPERTY FACTOR:
Investment in New Business Facility
Average Inventory & Allocation Ratio

$

406,022.00 Line 63 – Part D (original year)
0 .00

Total Qualifying Kansas Property

$

Kansas Beginning Property (Current Year)
Kansas Ending Property (Current Year)
Total Property
Multiply by 50%
Average Property
Total Rents in Kansas X 8 (Current Year)

406,022.00

$

202,067,263.00

271,976,820.00

$ 474,044,083.00

50 %

$ 237,022,042.00

3,438,576.00


E
L
P
M
A
X
E

Total Average Kansas Property

$ 240,460,618.00

Property Factor

0.1689%


(Total qualifying Kansas
property divided by total average Kansas property)


PAYROLL FACTOR:

Total Kansas wages (Current Year)
Divide by Kansas Employees (Current Year)
Average Kansas Salary (Current Year)
Multiply by Number of Qualified Business

Facility Employees

$

$

4,668,101.00

673

6,936.00

5

Total Facility Wages
Total Kansas Wages (Current Year)

Line 40 – Part C (original year)

$
$

Payroll Factor

Property Factor
Payroll Factor
Total Percent
Divide by 2
Average Percent

34,680.00
4,668,101.00
0.7429%

0.1689 %

0.7429 %

0.9118 %

22

0.4559 %


Kansas Total Income (Current Year)

$

Allocated Qualified Business Income

10,130,145,00 K-120S: Line 18

$

46,183.00 K-34: Line 16

Sole proprietorship, Partnership or S Corporation stop here.
Please provide a copy of the property and payroll factor calculation sheet to the sole proprietor, partners or
shareholders.
5

K-40 & K-41 FILERS: EXAMPLE FOR LINES 16 THROUGH 21 OF SCHEDULE K-34
To determine the tax amount on the individual’s QBF income, the sole proprietor, partner or shareholder must multiply
the total QBF income by the percentage owned or per share basis to arrive at the individual’s share of QBF income. The
individuals share of QBF income must then be multiplied by an effective tax rate. The effective tax rate is the individual’s
total Kansas tax liability divided by that individual’s total Kansas taxable income.

Sole proprietor, partner or shareholder percentage (owned or per share basis): 35%
Allocated qualified business income:
Times Percentage owned:

$ 46,183.00
K-34: line 16
35 %

Your share of qualified business facility income:

$ 16,164.05

E
L
P
M
A
X
E

The following two lines calculate your tax rate for the qualifying business income:
Your total Kansas tax liability:
Divided by your taxable income:
Effective tax rate:

$ 2, 277.00
K-40: line 8 or 12 (whichever is applicable)

$ 49,647.00
K-40: line 7

4.5864 %


Your share of qualified business facility income:
Multiply by effective tax rate:
Tax on qualified facility income:

$ 16,164.05

4.5864 %

$
741.00


50% of tax:

$

Total qualified employees and investment credit:
Times your percentage owned:
Your share of credit:

$

$

370.00


7,000.00
K-34: line 13

35 %

2,450.00


Credit allowable: (50% of tax or your share of credit, whichever is less)

6

$

370.00 K-34: line 21


7


Credit denied. No new
credits for qualified
business located in
Metropolitan counties
after 12-31-2010.

Yes

Is the investment
located in a
metropolitan
county? Douglas,
Johnson,
Leavenworth,
Sedgwick, Shawnee
or Wyandotte.

Yes

Is the increase
in employees
2 or more?

Yes

Is the taxpayer a
manufacturing
business?

No

Yes

Credit: $2,500

for each qualified
employee; $1,000
for each $100,000
of qualified
investment.

Yes

No

Yes

Is the increase
20 or more full
time positions?
No

Yes

Yes

Credit: $100 for each
qualified employee;
$100 for each $100,000
of qualified investment.

Yes

Is the increase in
employees
2 or more?

No

Is the taxpayer classified
under NAICS 45411,
511210 or 711212?

No

Is this the corporate or
business headquarters
or an ancillary support
facility of a retail business?

Yes

Does the
taxpayer qualify
as a retailer?

No

No

Credit
denied.

Credit
denied.

Manufacturing: All commercial enterprises identified under the manufacturing NAICS Codes.
Nonmanufacturing: Any commercial enterprise other than a manufacturing business or a retail business. (Includes
corporate or business headquarters of a “retail business” for years commencing after 12-31-93.)
Manufacturing and nonmanufacturing: Credit is computed once and the remainder of the credit is carried over until
utilized for as long as the taxpayer maintains the minimum number of qualified employees of that type of business.
Retail business: Any commercial enterprise primarily engaged in the sale at retail of goods or services, or both.
Credit must be recomputed each year for a ten year period.
Corporate or business headquarters: A qualified investment where principal officers of the corporation or business
are housed and from which direction, management or administrative support for transactions is provided for a
corporation, business or a division of a business or regional division of a business.
Ancillary support: A facility which is operated by a business and whose function is to provide services in support
of the business, but is not directly engaged in the business’ primary function.
NAICS 45411: Catalog and Mail-Order Houses
NAICS 511210.: Prepackaged Software
NAICS 711212: Auto Racetrack

Business is located in “any
other” region. Credit: $1,500
for each qualified employee;
$1,000 for each $100,000 of
qualified investment.

Credit
denied.

No

No

DEFINITIONS

Is the increase
in employees
5 or more?

Yes

Is the taxpayer a
nonmanufacturing
business?

Is the investment
located in a
nonmetropolitan
region? (Declared
by Department of
Commerce) Contact
that Department to
determine location.

Credit
denied.

No

No

For Facilities Which Began Operations On or After January 1, 1993

For a quick reference as to whether you qualify for the credit please use the flowchart below.

Income Tax Quick Reference Flowchart

8

*
**

No

No

No

Credit: $2,500 for each
qualified employee;
$1,000 for each $100,000
of qualified investment.*

Yes

Is the investment located
in a nonmetropolitan region
(Declared by Department of
Commerce)? Contact
that Department to
determine location.

Credit denied.

No

Business is located in “any
other” region. Credit: $1,500
for each qualified employee;
$1,000 for each $100,000 of
qualified investment.*

Credit: $100 for each
qualified employee;
$100 for each $100,000
of qualified investment.**

Credit is computed once and the remainder of the credit is carried over until utilized as long as the taxpayer maintains the minimum number of qualified employees.
Credit must be recomputed each year for a ten year period.

Credit denied. No new
credits for qualified business
located in Metropolitan
counties after 12-31-2010.

Yes

Is the investment located
in a metropolitan county?
Douglas, Johnson,
Leavenworth, Sedgwick,
Shawnee, or Wyandotte.

Yes

Was the qualifying
investment the principal
place from which the trade
or business of the taxpayer
is directed or managed and
did the facility facilitate the
creation of at least 20
new full-time positions?

Yes

Is the increase in
employees 2 or more?

For a quick reference as to whether you qualify for the credit please use the flowchart below.

Privilege Tax (Banks and Savings & Loans) Quick Reference Flowchart

INSTRUCTIONS FOR SCHEDULE K-34

LINE 3: Enter the date the QBF originally commenced
operations at this location, if this is a new location enter
the date used on line 6.

GENERAL INFORMATION
K.S.A. 79-32,160(f) requires that taxpayers claiming
the business and job development credit provide
information aimed at helping the legislature assess the
economic impact of this credit. This information is captured
on line 8b and lines A & B under Payroll Information –
these lines are not to be used to calculate the credit.

LINE 4: Mark the box which best describes the business
activity performed at the QBF.
Retail or Service:
• any commercial enterprise primarily engaged in the
sale at retail of goods or services taxable under the
Kansas retailers’ sales tax act;
• any service provider set forth in K.S.A. 17-2707
(doctor, lawyer, accountant, engineer, etc. - refer to
listing in the Q & As, available on our website at
ksrevenue.gov) and amendments thereto;
• any bank, savings and loan or other lending
institution;
• any commercial enterprise whose primary business
activity includes the sale of insurance; and
• any commercial enterprise deriving its revenue from
noncommercial customers in exchange for personal
services such as, but not limited to, barber shops,
beauty shops, photographic studios and funeral
services.
Manufacturer: All commercial enterprises identified
under the manufacturing standard industrial classification
codes 20 through 39 or appropriate manufacturer NAICS
code. See pages 21 through 25.
Contractor - Retailer: Any contractor other than a
contractor-nonmanufacturer.
Contractor - Nonmanufacturer: A contractor that
primarily (more than 50%) engages in the following
services shall be considered as a contractornonmanufacturer:
• the service of installing or applying tangible personal
property in connection with the original construction
of a building or facility;
• the original construction, reconstruction, restoration,
remodeling, renovation, repair or replacement of a
residence; or
• the construction, reconstruction, restoration,
replacement or repair of a bridge or highway.
Original construction shall mean the first or initial
construction of a new building or facility. The term “original
construction” shall include the addition of an entire room
or floor to any existing building or facility, the completion
of any unfinished portion of any existing building or facility
and the restoration, reconstruction or replacement of a
building or facility damaged or destroyed by fire, flood,
tornado, lightning, explosion or earthquake, but such term,
except with regard to a residence, shall not include
replacement, remodeling, restoration, renovation or
reconstruction under any other circumstances.

The Business and Job Development Credit
(K-34) Defined. This credit is a non-refundable tax credit
applied against income tax or privilege tax. It is allowable
to any Kansas taxpayer who shall invest in a qualified
business facility (QBF) and who shall hire a certain
number of qualified business facility employees (QBFE)
as a direct result of that QBF investment. There is no
minimum amount of investment necessary to qualify;
however, some investment must have been made.
Schedule K-34 tracks employees and investments for
the life of each credit. Schedule K-34, Part B should be
completed and submitted for every credit claimed; Parts
C and D of the K-34 should be filled out once per facility
and added to as needed for the life of the credit.
Effective with tax year 2011, this credit is no longer
available in metro counties. Beginning in tax year
2012, it will not be available in metro and non-metro
counties.
When to File. Schedule K-34 should be filed with the
tax return in the tax year the investment became available.
Taxpayers electing to defer the credit must complete and
enclose their K-34 with the tax return for which qualified
investment became available for use. If establishing a
credit for the first time, the K-34 should be filed with the
original or amended return for the year qualified. If an
entity is claiming both a retail or service credit and a
manufacturer or nonmanufacturer credit, complete a
separate K-34 for each type of business activity credit.
SPECIFIC LINE INSTRUCTIONS
Complete the name and EIN information required at
the top of Schedule K-34. If the taxpayer is a shareholder,
partner or member, enter the name of the S Corporation,
Partnership, LLC or LLP and the EIN of that entity on the
second line.
PART A – DESCRIPTION OF QUALIFIED BUSINESS FACILITY
LINE 1: Enter the name and EIN of the legal entity making

the investment at the QBF.

LINE 2: Enter the location information for the QBF.

a. Street address or legal description of the qualified
business facility (cannot be a post office box).
b. City, county number (page 31) and county name
where the QBF is located. This information will
determine whether the credit is located in a
metropolitan county, nonmetropolitan region or
other region. (Note: Tax year 2010 is the last year
this credit is available for metropolitan counties)
c. North American Industry Classification System
(NAICS) code for the type of activity conducted at
the QBF.

Nonmanufacturer - Regular: Any commercial enterprise
other than a manufacturing business or retail business.
Nonmanufacturer - Business Headquarters: A qualified
facility where principal officers of the business are housed
and from which direction, management or administrative
support for transactions is provided for a business or
division of a business or a regional division of a business.
9

Nonmanufacturer - Ancillary Support: A facility which is
operated by a business and whose function is to provide
services in support of the business but is not directly
engaged in the business’ primary function. To be
considered ancillary support a declaration must be made
by the Department of Commerce.
Nonmanufacturer - NAICS codes: 45411 catalog and
mail-order houses; 511210 pre-packaged software; or
711212 auto racetrack.

LINE 10 (column b): If this is a new credit, enter the
QBF investment from the appropriate column in Part D,
line 63. If this is a carry forward leave blank.
LINE 11 (column a): If this is a new credit, enter credit
factor from the appropriate column in Part D, line 66.
For each of the nine succeeding tax years, enter credit
factor from the appropriate column in Part D, line 66.
LINE 11 (column b): If this is a new credit, enter credit
factor from the appropriate column in Part D, line 66. If
this is a carry forward leave blank.

LINE 5: Mark the box that best describes the type of
qualified investment made at this facility.
New Facility: A new building at a new location.
Investment or expansion at an existing facility: A building
addition or a new investment such as machinery and
equipment at an existing location.
Move from old Kansas location to new Kansas location:
A business whose operation relocates from one location
to another within Kansas.
Move from out of state to a new location in Kansas: An
operation that relocates their physical business from
another state to within Kansas.
Other: Describe the type of qualified investment that
does not meet any of the above.
No new investment: There is no new investment at the
QBF during this tax year. Schedule K-34, Part C and D
are being completed to recompute an existing Retail or
Service credit, or to claim a manufacturer or
nonmanufacturer carry forward credit.

LINE 12 (column a): If this is a new credit, enter
investment credit amount from the appropriate column
in Part D, line 67. For each of the nine succeeding tax
years, enter investment credit amount from the
appropriate column in Part D, line 67.
LINE 12 (column b): If this is a new credit, enter the
investment credit amount from the appropriate column
in Part D, line 67. If this is a carry forward leave blank.
LINE 13 (columns a or column b): Add lines 9 and 12.
This should equal Part D, line 68 in the appropriate
column.
LINE 14 (column b): Corporate or Privilege Taxpayers:
Enter the amount from line 13 or Kansas tax liability (less
any other non-refundable credits), whichever is less. Also,
enter this amount on the appropriate line of Form K-120
or Form K-130. Individual Taxpayers: Skip this line.
For taxpayers claiming carry forward only, enter the
amount of the available carry forward from line 15 of the
prior tax year’s Schedule K-34.

LINE 6: Enter the date the investment for this credit
became operational or available for use by the taxpayer.
LINE 7: Attach a description of the investment made at
the QBF during the tax year and how it directly relates to
the hiring of the requisite number of additional employees.

LINE 15 (column b): Corporate or Privilege Taxpayers:
Subtract line 14 from line 13. Enter on line 70, Part D for
the appropriate tax year. Amount cannot be less than
zero. Individual Taxpayers: Skip this line.

PART B - COMPUTATION OF CREDIT FOR THIS K-34
Complete Part C and D worksheet prior to filling in
Part B. When computing Part B, use the column that
coincides with the selection made on line 4, Part A.
LINE 8a (column a): If this is a new credit, enter
of QBFE from the appropriate column in Part C,
For each of the nine succeeding tax years, enter
of QBFE from the appropriate column in Part C,

Retail or Service
LINE 16 (column a): Enter the amount of QBF income.
Attach a schedule detailing how the QBF income was
determined. QBF income is the Kansas taxable income
derived by the taxpayer or legal entity making the
investment from the operation of the qualified facility. See
the example worksheet on page 8 of the Schedule K-34.

number
line 40.
number
line 42.

LINE 8a (column b): If this is a new credit, enter number
of QBFE from the current year’s appropriate column in
Part C, line 40. If this is a carry forward leave blank.

LINE 17 (column a): Corporate or Privilege Taxpayers:
The legal entity making the qualified investment must
divide its QBF income by its total Kansas taxable income.
This percentage must then be multiplied by the legal
entity’s Kansas income tax liability or privilege tax liability
resulting in tax on the QBF income. See example on page
9. Individual Taxpayers: A sole proprietorship, partnership
or S corporation must determine the QBF income. The
sole proprietor, partner or shareholder must then multiply
the total QBF income by the percentage owned or per
share basis to arrive at the individual’s share of QBF
income. The individuals share of QBF income must then
be multiplied by an effective tax rate. The effective tax
rate is the individual’s total Kansas tax liability divided by
that individual’s total Kansas taxable income. The
resulting amount is the tax on that individual’s QBF
income. See example on page 10.

LINE 8b: Enter the total Kansas payroll for the qualified
business facility employees identified on line 8a.
LINE 9 (column a): If this is a new credit, enter credit
amount from the appropriate column in Part C, line 43.
For each of the nine succeeding tax years, enter credit
amount from the appropriate column in Part C, line 43.
LINE 9 (column b): If this is a new credit, enter the credit
amount from the appropriate column in Part C, line 43. If
this is a carry forward leave blank.
LINE 10 (column a): If this is a new credit, enter the
QBF investment from the appropriate column in Part D,
line 63. For each of the nine succeeding tax years, enter
the QBF investment from the appropriate column in Part
D, line 65.
10

LINE 18 (column a): Multiply line 17 by 50%. The
maximum amount allowed is 50% of the tax on QBF
income. See example on page 9.

determined by dividing the sum of the number of QBFE
on the last business day of each full calendar month
during the portion of the taxable year in which the QBF
was in operation by the number of full calendar months.
In the case of an investment in a QBF which facility existed
and was operated by the taxpayer or related taxpayer
prior to such investment, the number of QBFE employed
in the operation of the facility shall be reduced by the
average number of individuals employed in the operation
of the facility during the taxable year preceding the
taxable year in which the QBF investment was made at
the facility (base).
The information related to the number of QBFE must
be computed on Part C of the Schedule K-34. Current
year is the year for which the entity’s tax return is
being filed.

LINE 19 (column a): Enter amount from line 13 or line
18, whichever is less. Also, enter on the appropriate line
of Form K-120 or Form K-130.
Shareholder or Partner
LINE 20 (column a or column b): Enter the percentage
of ownership for this partner or per share basis for this
shareholder when credit was first qualified.
LINE 21 (column a): Enter the partner or shareholder’s
amount of credit. Multiply line 13 by line 20, or enter
amount on line 19 (whichever is less).
LINE 21 (column b): Enter the partner or shareholder’s
amount of credit. Multiply line 13 by line 20. For taxpayers
claiming carry forward only, enter the amount of the
available carry forward from line 24 of the prior tax year’s
Schedule K-34.

Retail or Service: When the taxpayer is considered
as a “retail or service” or “contractor-retailer” business,
the number of QBFE must equal or exceed two. The
number of QBFE will be the number computed the year
the credit became available and will never increase,
although it may decrease, if the number of QBFE for this
credit is not maintained for the succeeding nine years.

LINE 22 (column a or column b): Enter the partner or
shareholder ’s Kansas tax liability (less any other
nonrefundable credits).

Manufacturer or Nonmanufacturer: When the
taxpayer meets the definitions of:
a. manufacturer, the increase of QBFE must equal or
exceed two.
b. nonmanufacturer, the increase of QBFE must equal
or exceed five.
c. business headquarters “ancillary support”, NAICS
code 45411, 511210 or 711212, the increase in
QBFE must equal or exceed twenty.
Part C determines the number of qualified employees
at the facility and amount of employee credit. Data from
this schedule will be transferred to Part B, Schedule
K-34. Part C displays all ten years that a retail or service
credit has to be recomputed or each year that a
manufacturer or nonmanufacturer may have a carry
forward. Continue to use Part C Schedule K-34 from year
to year until the ten years of the retail or service credit
has been exhausted or the carry forward is exhausted
for the manufacturer or nonmanufacturer.

LINE 23 (column a or column b): Enter the amount
from line 21 or line 22, whichever is less. Also enter this
amount on the appropriate line of Forms K-40 or K-41.
Credit Deferment: Enter the year the credit will be deferred
(cannot exceed three years). Employees and investment
must be maintained during the years the credit is
deferred. Part C and Part D of Schedule K-34 must be
submitted for each of these years to report the QBFE
and QBF investment.
LINE 24 (column b): Subtract line 23 from line 21. Enter
on line 70, PART D for the appropriate year. This amount
cannot be less than zero.
Payroll Information
LINE A: Enter the entity’s total number of employees in
the state of Kansas for this tax period.
LINE B: Enter the total compensation paid during this tax
period for total number of employees reported on line A.
PART C - DETERMINING QUALIFIED EMPLOYEES AND CREDIT

Retail or Service credit, use Columns A, B and C to
establish a credit for the first time at a location, and a
new column for each of the succeeding nine years to
recompute the credit or to start a new layer. A new column
must be filled out to recompute the credit each year.

A qualified business facility employee (QBFE) is defined
as a person who is employed by the taxpayer in the
operation of the QBF as a direct result of the qualified
investment made during the taxable year for which the
credit is claimed. A person shall be considered engaged
if such person performs duties in connection with the
operation of the QBF on: A) regular, full-time basis, B)
part-time basis, provided the person is customarily
performing such duties at least 20 hours per week
throughout the taxable year, or, C) seasonal basis,
provided such person performs such duties for
substantially all of the season customary for the position
in which the person is employed.
The number of QBFE during any taxable year shall be
determined by dividing by 12 the sum of the number of
QBFE on the last business day of each month of the
taxable year. If the QBF is in operation for less than the
entire taxable year, the number of QBFE shall be

Manufacturer and Nonmanufacturer use Columns
A, B and C to establish a credit at one location for the
first time. The current year information must be filled out
for each year that any carry forward is being claimed.
Use the next column available for the current year to verify
that the employees have been maintained.
LINES 25 through 36 (column A): Enter the months in
the order of the filing period being used by the legal entity.
LINES 25 through 36 (column B): Enter year-end date
of the legal entity’s filing period for the prior taxable year.
Column B is used to compute activity at the QBF prior to
the year in which a credit is qualified. That is referred to
as the “base” year.
11

If this is a new facility in Kansas or the operations have
moved from out of state to a new location in Kansas, this
column will be left blank. If the facility was in operation in
the prior tax year or the taxpayer has moved from a prior
Kansas location, enter the total number of employees at
this facility as of the last business day of each month of
the taxable year preceding the tax year the investment
initially qualified.

facility in this taxable year, the average number of
transferred employees should be included in the base
amount.
LINE 40 (columns C through L): Subtract line 39 from
line 38. If amount is less than the minimum increase
required for this credit (2, 5 or 20) then no credit is
allowed. If amount is a negative figure it must be removed
from the employee counts on previous retail or service
credit years (see EXAMPLE 1 below showing analysis of
the fourth year).

LINES 25 through 36 (columns C through L): Enter
year end date of the legal entity’s filing period for the
current year. Use column C if establishing a credit for the
first time and complete columns D through L for each
succeeding tax year of the credit for recomputing a retail
or service credit or for a manufacturer or
nonmanufacturer carry forward.

LINE 41 (columns C through L): Enter the number of
decreased qualified employees from line 40 from the
current year. This number must be equal to or less than
the number of qualified employees being claimed on line
40 (see EXAMPLE 1 below).

Enter the total number of employees at the facility as of
the last business day of each month of the taxable year
the investment qualified.

LINE 42 (columns C through L): Subtract line 41 from
line 40. This is the adjusted number of qualified
employees to be carried to line 8a, Part B, Schedule
K-34. If the adjusted average number of employees falls
below the minimum number of employees required to
claim a credit, then the credit is forfeited.

LINE 37 (column B through L): Add amounts on lines
25 through 36.
LINE 38 (column B through L): Divide line 37 by the
number of full months in this tax year the facility was
available for use. The resulting number of employees must
then be rounded down to the next whole number.

LINE 43 (columns C through L): Retail or Service:
Taxpayers meeting the definition of “retail or service” or
“contractor-retailer” and computing the employee credit
for the first year, multiply line 40 by $100. For the
succeeding tax years, multiply line 40 or line 42 by $100
as applicable. Manufacturer/Nonmanufacturer: When the
taxpayer meets the definition of “manufacturer or
nonmanufacturer” and the QBF is located in:
• A “nonmetropolitan region” - multiply line 40 by $2,500
• Any “other region” - multiply line 40 by $1,500

LINE 39 (columns C through L): For Column C enter
number of base employees from line 38 in Column B or
the prior taxable year. For columns D through L the
average employees on line 38 becomes the base on line
39 for the current year. If current tax year column contains
employees that were transferred from another Kansas

EXAMPLE 1 (for lines 40 and 41) – Retail or Service Credit Only
(C)
First year
employees

Line
Line
Line
Line
Line
*
**

38
39
40
41
42

Average Employees
Base Employees
Qualified Employees
Decrease in Employees
Adjusted Employees

(D)
Second year
employees

12
0
12
-2**
10

15
12
3
-3**
0

(E)
Third year
employees

15
15
0
*
0

(F)
Fourth year
employees

10
15
-5
0

No credit was established for this year, no employees to deduct.
Line 41 was computed by decreasing by 3 of the 5 employees lost in the fourth year. Additional decreases of employees in succeeding years
should be added to line 41, column C and line 42 adjusted accordingly.

The qualified business facility investment shall be
determined by dividing by twelve the sum of the total
value of such property at that facility on the last business
day of each calendar month of the taxable year. If the
QBF is in operation for less than an entire taxable year,
the qualified business facility investment shall be
determined by dividing the sum of the total value of such
property at that facility on the last business day of each
full calendar month during the portion of such taxable
year during which the qualified business facility was in
operation by the number of full calendar months during
the period. In the case of an investment in a QBF which
existed and was operated by the taxpayer or related

PART D - DETERMINING QUALIFIED INVESTMENT AND CREDIT
Qualified business facility investment is the value of
the real and tangible personal property, except inventory
or property held for sale to customers in the ordinary
course of the taxpayer’s business, which constitutes the
qualified business facility, or which is used by the taxpayer
in the operation of the qualified business facility, during
the taxable year for which the business and job
development credit is claimed. The value of such property
during the taxable year shall be: 1) its original cost if owned
by the taxpayer; or 2) eight times the net annual rental
rate if leased by the taxpayer.
12

taxpayer prior to such investment, the amount of the
taxpayer’s QBF investment shall be reduced by the
average amount of QBF investment of the taxpayer or
related taxpayer in the facility for the taxable year
preceding the taxable year in which the QBF investment
was made at the facility (base).
Part D, Schedule K-34 determines the amount of
qualified investment at the facility and the amount of
investment credit. This information will be transferred to
Part B, Schedule K-34. Part D displays all ten years that
a retail or service credit has to be recomputed. Continue
to use Part D from year to year until the ten years of the
retail or service credit has been exhausted.

LINE 59 (column B through L): Add amounts on lines
57 and 58.
LINE 60 (column C through L): For Column C enter
amount of base investment from line 59, Column B or
the prior taxable year. For columns D through L the
average investment on line 59 becomes the base on line
60 for current year. If current tax year column contains
investment that was transferred from another Kansas
facility in this taxable year, the average amount of that
transferred investment should be included in the base
amount.
LINE 61 (column C through L): Subtract line 60 from
line 59. This is the total of investment in excess of the
base. Column C, or current taxable year is a negative
number stop here, you are not qualified for the credit.

Current year is the year for which the entity’s
tax return is being filed.

LINE 62 (column C through L): Enter the average
amount of investment that was made during the year(s)
that did not directly result in the hiring of qualified
employees. This will include investment made during this
tax year and prior tax years since the qualified investment
was made. If this is qualified investment at a new location,
no entry will be made on this line. If you made qualified
investment at an existing facility, you must enter the
portion of the new investment that did not directly result
in the hiring of qualified employees. This amount will be
subtracted from the total qualified business facility
investment.

Retail or Service credit use columns A, B and C to
establish a credit for the first time at a location, and a
new column for each succeeding nine years to recompute
the credit or to start a new layer. A new column must be
filled out to recompute the credit each year.
Manufacturer and Nonmanufacturer use columns
A, B and C to establish a credit at one location for the
first time. Investment information must be completed for
the initial year the credit is claimed but not for succeeding
years if only claiming available carry forward.
LINES 44 through 55 (column A): Enter the months in
the order of the filing period being used by the legal entity.

LINE 63 (column C through L): Subtract line 62 from
line 61. This is the amount of investment that qualifies
for the credit. For the first year, if this is a negative number
then this current year does not qualify for the credit. For
retail or service credits, columns D through L must be
taken from the investment amounts on previous retail
service credit years (see EXAMPLE 2 on next page).

LINES 44 through 55 (column B): Enter year end date
of the legal entity’s taxable year preceding the tax year
the investment initially qualified. Column B is used to
compute activity at the QBF prior to the year in which a
credit is qualified. That is referred to as the “base” year.
Enter the total amount of investment at the facility as of
the last business day of each month of the taxable year
the investment qualified.

LINE 64 (column C through L): Retail or Services
credits, for columns D through L, enter the difference in
amount of qualified business facility investment change
due to a decrease after computing current investment
(see EXAMPLE 2 showing an analysis of the fourth year.)

LINES 44 through 55 (columns C through L): Enter
the year end date of the legal entity’s filing period for the
current year. Use column C if establishing a credit for the
first time and complete columns D through L for each
succeeding tax year of the credit for recomputing a retail
or service credit. Manufacturers and nonmanufacturers
do not have to complete these unless establishing a
new credit.
Enter the total investment at the facility as of the end of
each full month of operation at the qualified business
facility. If the QBF was in operation for only three full
months during the tax year, you would only enter those
three months.

LINE 65 (column C through L): Subtract line 64 from
line 63.
LINE 66 (column C through L): Divide line 65 by
$100,000. If the remainder is $51,000 or more, round to
the next higher credit factor number. If the adjusted
qualified investment is less than $51,000, but greater
than zero, the investment credit is zero. However, the
associated employee credit is still eligible.
LINE 67 (column C through L): This is the total amount
of credit available for your qualified investment. (Multiply
line 66 by $100 or $1,000, whichever applies to your
type of business as shown on page 1, line 4 of Schedule
K-34.)

LINE 56 (column B through L): Add amounts on lines
44 through 55.
LINE 57 (column B through L): Divide line 56 by the
number of full months in the tax year the facility was
available for use.

LINE 68 (column C through L): Add line 43 of Part C Total Employee Credit to line 67 of Part D - Total
Investment Credit.

LINE 58 (column B through L): Property rented by the
taxpayer and used at the QBF is valued at eight times
the net annual rental rate.

LINE 69 (column C through L): Enter the amount of
credit being used for the current filing period and the
cumulative amount of credit used from prior periods.
13

LINE 70 (column C through L): (Manufacturer or
Nonmanufacturer only.) Subtract line 69 from line 68.
If you have a credit carry forward you must maintain the
minimum number of qualified employees in the
succeeding tax year in order to claim any remaining carry
forward credit. That minimum number is as follows:

• nonmanufacturing must equal at least 5 qualified
business facility employees
• business headquarters, ancillary support or NAICS
codes 45411, 511210, and 711212 must equal an
increase of at least 20 employees.
If you fail to maintain the minimum number of qualified
employees the amount of remaining carry forward credit
is forfeited.

• manufacturing must equal at least 2 qualified business
facility employees

EXAMPLE 2 (for lines 63 and 64) – Retail or Service Credit Only

Investment

Line
Line
Line
Line
Line
Line
Line

59
60
61
62
63
64
65

(C)
First year
investment

(D)
Second year
investment

Total investment
$25,000
Base investment
0
Increased investment
25,000
Non-related investment
0
Average qualified investment 25,000
Decrease in investment*
0
Adjusted qualified investment 25,000

(E)
Third year
investment

$30,000
$29,500
25,000
30,000
5,000
-500
0
0
5,000
-500
-3,000 (-500 -2,500)
0
2,000
0

(F)
Fourth year
investment

$27,000
29,500
-2,500
0
-2,500
0
0

* Line 64 was computed by decreasing line 63 by the amounts lost in the third and fourth year. Additional decreases in investment should be added
to line 64, Column C and line 65 adjusted accordingly.

In EXAMPLE 2, the first year’s increased investment in line 59 is $25,000. In the second year it is $5,000 (line 61). In the third year, there
was a decrease in investment of $500. This decrease affects the prior computations of investment. The decrease of $500 is subtracted from
the second year’s increased investment of $5,000 for a net increase remaining of $4,500. In the fourth year, the investment decreased by
another $2,500. This decrease offsets the second year’s investment. The total decrease is $3,000 [–$500 (third year of increased investment)
-$2,500 (fourth year of increased investment)]. The revised qualified investment for the second year is left at $2,000, line 65.

Business Headquarters: A facility where principal
officers of the business are housed and from which
direction, management or administrative support for
transactions is provided for a business or division of a
business or regional division of a business. (K.S.A.
74-50,114(c))
Commencement of Commercial Operations:
Commencement of commercial operations shall be
deemed to occur during the first taxable year for which
the QBF is first available for use by the taxpayer, or first
capable of being used by the taxpayer, in the revenue
producing enterprise in which the taxpayer intends to use
the QBF. (K.S.A. 79-32,154(f))
Facility: A facility is defined as any factory, mill, plant,
refinery, warehouse, feedlot, building or complex of
buildings located within the state, including the land on
which the facility is located and all machinery, equipment,
and other real and tangible personal property located
at or within a facility and used in connection with the
operation of the facility. The word building shall include
only structures within which individuals are customarily
employed or which are customarily used to house
machinery, equipment or other property. (K.S.A.
79-32,154(a)) If there is a complex of buildings, the entire
complex, including all buildings in the complex, is
considered by KDOR (Kansas Department of Revenue)
to be a single facility.
Facility Types that Cannot Claim this Credit: No
credit will be allowed for an investment in a public utility

DEFINITIONS AND TERMS
Ancillary Support: A facility which is operated by a
business and whose function is to provide services in
support of the business, but is not directly engaged in the
business’ primary function. (K.S.A. 74-50,114(a))
Any ancillary support business which would otherwise
be eligible for an income or privilege tax credit shall
incorporate in its tax filing for the credit a statement from
the secretary of commerce which includes a finding by
the secretary that the job expansion incident to the credit
claimed would not have occurred in the absence of the
credit. (K.S.A. 74-50,114(g))
Base: The average employees and investment that
reduce the current tax period computation of the credit. If
the qualified business facility (QBF) was in operation prior
to the implementation of the qualified business facility
income (QBFI), an average of the prior tax periods
employees and investment is computed. If the investment
is in a new facility or is new to Kansas the base would be
zero. If the investment is being moved from one location
in Kansas to another location in Kansas, the base would
be the average number of employees and average
investment in the taxable year preceding the taxable year
in which the qualified business facility investment was
made at the new Kansas location.
Business: Business means any manufacturing business
or nonmanufacturing business. (K.S.A. 74-50,114(b))
14

1. The facility must be employed by the taxpayer in
the operation of a revenue producing enterprise as
defined. It will not be considered a QBF if the taxpayer’s
only activity is to lease it to another person or firm. If the
taxpayer employs only a portion of the facility in the
operation of a revenue producing enterprise, and leases
another portion of the facility to another person or firm
or does not otherwise use the other portion in the
operation of a revenue producing enterprise, that portion
employed by the taxpayer in the operation of a revenue
producing enterprise shall be considered a QBF if the
other requirements in (2) below are met.
2. If the facility was acquired by the taxpayer from
another person or firm, the facility must not have been
employed immediately prior to the transfer of its title to
the taxpayer, or to the commencement of the term of the
lease of the facility to the taxpayer, by any other person
or firm in the operation of a revenue producing enterprise
and the taxpayer continues the operation of the same or
substantially identical revenue producing enterprise.
(K.S.A. 79-32,154(b))
Qualified Business Facility Employee (QBFE): A
QBFE is defined as a person who is employed by the
taxpayer in the operation of a QBF during the taxable
year for which the credit is claimed. A person will be
deemed to be so engaged if they perform duties in
connection with the operation of the QBF on a: 1) regular
full-time basis; 2) part-time basis, providing the person
normally performs this type of duty at least twenty hours
each week throughout the taxable year or, 3) seasonal
basis, provided the employee performs duties for
substantially all of the season for which employees are
customarily hired.
The number of QBFEs during any taxable year shall
be determined by dividing by twelve the sum of the
number of QBFEs on the last business day of each month
of the taxable year. If the QBF is in operation for less
than the entire taxable year, the number of QBFEs shall
be determined by dividing the sum of the number of
QBFEs on the last business day of each full calendar
month during the portion of the taxable year during which
the QBF was in operation by the number of full calendar
months during the period. In the case of an investment
in a QBF, which facility existed and was operated by the
taxpayer or related taxpayer prior to new investment. The
number of QBFEs employed in the operation of the facility
shall be reduced by the average number, computed as
provided in this paragraph, of individuals employed in
the operation of the facility during the taxable year
preceding the taxable year in which the QBF investment
was made at the facility. (K.S.A. 79-32,154(d))
Qualified Business Facility (QBF) Income: Qualified
Business Facility Income shall mean the Kansas taxable
income derived by the taxpayer from the operation of
the QBF. If a taxpayer has income derived from the
operation of a QBF as well as from other activities
conducted within this state, the Kansas taxable income
derived by the taxpayer from the operation of the QBF
shall be determined by multiplying the taxpayer’s Kansas
taxable income by a fraction, the numerator of which is
the property factor as defined below, plus the payroll

as defined in K.S.A. 66-104 and amendments thereto,
or a swine production facility as defined in K.S.A. 175903 and amendments thereto.
Leaving the Facility-Investment/Employees: No
credit will be allowed for any investment that leaves the
facility per K.S.A. 79-32,153(a) and 79-32,160(a). This
would include, but not be limited to, motorized vehicles.
Where an employee performs services for the taxpayer
outside the QBF, the employee shall be considered
engaged or maintained in employment at the QBF if:
1) the employee’s service performed outside the QBF is
incidental to the employee’s service inside the QBF or,
2) the base of operations or, the place from which the
service is directed or controlled, is at the QBF.
Manufacturing Business: Manufacturing business
means all commercial enterprises identified under the
manufacturing Standard Industrial Classification Codes,
major groups 20 through 39. (K.S.A. 74-50,114(e))
KDOR would find that any commercial enterprise which
has been identified under the manufacturing sector under
the North American Industry Classification system shall
also be considered as a manufacturing business for
purposes of the business and job development credit.
Metropolitan County: Metropolitan county means
the county of Douglas, Johnson, Leavenworth, Sedgwick,
Shawnee or Wyandotte. (K.S.A. 74-50,114(f)) Note:
Legislation repealed the businesses & job development
tax credits (both jobs and investment) for all metro
counties starting in tax year 2011 (Douglas, Johnson,
Leavenworth, Sedgwick, Shawnee, and Wyandotte).
Nonmanufacturing Business: Nonmanufacturing
business means any commercial enterprise other than a
manufacturing business or retail business.
Nonmanufacturing business shall also include the
business headquarters of an enterprise, ancillary support
of an enterprise, and an enterprise designated under
standard industrial classification codes 5961, 7948-0201
or 7372 regardless of the firm’s classification as a retail
business if that facility facilitates the creation of at least
20 new full-time employees. (K.S.A. 74-50,114(g))
Nonmetropolitan Region: A region established under
K.S.A. 74-50,116 and amendments thereto and is
comprised of any county or counties which are not
metropolitan counties. (K.S.A. 74-50,114(h))
KDOC (Kansas Department of Commerce) designates
the non-metropolitan regions for a specified period of
time. Any taxpayer that invests in a QBF that is located in
a designated nonmetropolitan region will be allowed an
enhanced credit for QBF employees.
Nonqualified
Employees
or
Investment:
Employees and investment that are transferred from one
Kansas facility to another are not allowed to be included
as increased employees or increased investment.
Other Region: A county or region that has not been
designated as a metropolitan county by statute and has
not been designated by KDOC as a nonmetropolitan
region.
Qualified Business Facility (QBF): QBF shall mean
a facility that meets the following requirements:
15

factor, as defined below, and the denominator of which is
two. In the case of financial institutions, the property and
payroll factors shall be computed utilizing the specific
provisions of the apportionment method applicable to
financial institutions, if enacted, and the QBF income shall
be based upon net income.
The property factor is a fraction, the numerator of which
is the average value of the taxpayer’s real and tangible
personal property owned or rented and used in
connection with the operation of the QBF during the tax
period, and the denominator of which is the average value
of all the taxpayer’s real and tangible personal property
owned or rented and used in this state during the tax
period. The average value of all such property shall be
determined as provided in K.S.A. 79-3281 and 79-3282,
and amendments thereto.
The payroll factor is a fraction, the numerator of which
is the total amount paid during the tax period by the
taxpayer for compensation to persons qualifying as QBF
employees at the QBF, and the denominator of which is
the total amount paid in this state during the tax period
by the taxpayer for compensation. The compensation
paid in this state shall be determined as provided in K.S.A.
79-3283, and amendments thereto.
The formula set forth shall not be used for any purpose
other than determining the QBF income attributable to a
QBF. (K.S.A. 79-32,154(g))
Qualified Business Facility (QBF) Investment: QBF
investment shall mean the value of the real and tangible
personal property, except inventory or property held for
sale to customers in the ordinary course of the taxpayer’s
business, which constitutes the QBF, or which is used by
the taxpayer in the operation of the QBF, during the
taxable year for which the business and job development
credit is claimed. The value of such property during such
taxable year shall be: 1) its original cost if owned by the
taxpayer, or 2) eight times the net annual rental rate, if
leased by the taxpayer. The net annual rental rate shall
be the annual rent rate paid by the taxpayer less any
annual rental rate received by the taxpayer from
sub-rentals.
The QBF investment shall be determined by dividing
by twelve the sum of the total value of such property at
that facility on the last business day of each calendar
month of the taxable year. If the QBF is in operation for
less than an entire taxable year, the amount of QBF
investment shall be determined by dividing the sum of
the total value of such property at that facility on the last
business day of each full calendar month during the
portion of such taxable year during which the QBF was
in operation by the number of full calendar months during
such period. In the case of an investment in a QBF, which
facility existed and was operated by the taxpayer or
related taxpayer prior to such investment, the amount of
the taxpayer’s QBF investment in such facility shall be
reduced by the average amount, computed as provided
in this paragraph, of the investment of the taxpayer or a
related taxpayer in the facility for the taxable year
preceding the taxable year in which the QBF investment
was made at the facility. (K.S.A. 79-32,154(e))
Related Taxpayer: Related taxpayer shall mean: 1) a
corporation, partnership, trust or association controlled

by the taxpayer; 2) an individual, corporation,
partnership, trust or association in control of the taxpayer
or, 3) a corporation, partnership, trust or association
controlled by an individual, corporation, partnership, trust
or association in control of the taxpayer. For the purposes
of this act, “control of a corporation” shall mean
ownership, directly or indirectly, of stock possessing at
least 80% of the total combined voting power of all classes
of stock entitled to vote and at least 80% of all other
classes of stock of the corporation; “control of a
partnership or association” shall mean ownership of at
least 80% of the capital or profits interest in such
partnership or association; and “control of a trust” shall
mean ownership, directly or indirectly of at least 80% of
the beneficial interest in the principal or income of such
trust. (K.S.A. 79-32,154(h))
Retail or Service Business: Retail or Service
Business means: 1) any commercial enterprise primarily
engaged in the sale at retail of goods or services taxable
under the Kansas retailer’s sales tax act; 2) any service
provider set forth in K.S.A. 17-2707, and amendments
thereto; 3) any bank, savings and loan or other lending
institution; 4) any commercial enterprise whose primary
business activity includes the sale of insurance and, 5)
any commercial enterprise deriving its revenues directly
from noncommercial customers in exchange for personal
services such as, but not limited to, barber shops, beauty
shops, photographic studios and funeral services. (K.S.A.
74-50,114(i))
Revenue Producing Enterprise: A revenue
producing enterprise is defined as one of the following:
• The assembly, fabrication, manufacture or
processing of any agricultural, mineral or
manufactured product;
• The storage, warehousing, distribution or sale of any
products of agriculture, aquaculture, mining or
manufacturing;
• The feeding of livestock at a feedlot;
• The operation of laboratories or other facilities for
scientific, agricultural, aquacultural, animal
husbandry or industrial research, development or
testing;
• The performance of services of any type;
• The feeding of aquatic plants and animals at an
aquaculture operation;
• The administrative management of any of the
foregoing activities; or,
• Any combination of the above activities.
Revenue producing enterprise shall not mean a swine
production facility as defined in K.S.A. 17-5903, and
amendments thereto. (K.S.A. 79-32,154(c))
Same or Substantially Identical Revenue
Producing Enterprise: A revenue producing enterprise
in which the products produced or sold, services
performed or activities conducted are the same in
character and use, are produced, sold, performed or
conducted in the same manner and to or for the same
type of customers as the products, services or activities
produced, sold, performed or conducted in another
revenue producing enterprise. (K.S.A. 79-32,154(i))
16

NORTH AMERICAN INDUSTRY CLASSIFICATION SYSTEM (NAICS)


CODES AND TITLE DESCRIPTIONS


Effective July 1, 2010, K.S.A. 74-50,131 Kansas enterprise zone act changed citations from (SIC) Standard Industrial
Classification code to (NAICS) the North American Industry Classification System
NAICS codes, developed under the authority of the office of management and budget of the office of the president
of the United States, replaces the SIC codes and is an industry classification system that groups establishments into
industries based on the activities in which they are primarily engaged.
The Kansas Department of Revenue has made a preliminary categorization of the NAICS codes to allow the taxpayer
to determine which industry group the taxpayer’s business activity is under. However, exceptions do occur. Industry
groups are allowed different amounts of credit, require different levels of qualified employees and methods of
computation. The industry groups are divided into four groups: (1) Manufacturing; (2) Nonmanufacturing; (3) Retail
and Services; and (4) Retail or Nonmanufacturing (depending upon the ultimate consumer). Any questions
regarding a specific industry group may be directed to the Office of Policy and Research, Kansas Department of
Revenue, PO Box 3506, Topeka, KS 666101-3506.
The following is a list of NAICS codes and title descriptions. The NAICS code for your business facility must be
entered on line 2c, Schedule K-34.
MANUFACTURING
K.S.A. 74-50,114(e) provides the definition of a manufacturing business as “all commercial enterprises identified under the
manufacturing NAICS subsectors 311 to 339.
Manufacturing
311111 Dog and Cat Food
Manufacturing
311119 Other Animal Food
Manufacturing
311211 Flour Milling
311212 Rice Milling
311213 Malt Manufacturing
311221 Wet Corn Milling
311222 Soybean Processing
311223 Other Oilseed Processing
311225 Fats and Oils Refining and
Blending
311230 Breakfast Cereal Manufacturing
311311 Sugarcane Mills
311312 Cane Sugar Refining
311313 Beet Sugar Manufacturing
311320 Chocolate and Confectionery
Manufacturing from Cacao
Beans
311330 Confectionery Manufacturing
from Purchased Chocolate
311340 Nonchocolate Confectionery
Manufacturing
311411 Frozen Fruit, Juice, and
Vegetable Manufacturing
311412 Frozen Specialty Food
Manufacturing
311421 Fruit and Vegetable Canning
311422 Specialty Canning
311423 Dried and Dehydrated Food
Manufacturing
311511 Fluid Milk Manufacturing
311512 Creamery Butter Manufacturing
311513 Cheese Manufacturing
311514 Dry, Condensed, and
Evaporated Dairy Product
Manufacturing
311520 Ice Cream and Frozen Dessert
Manufacturing
311611 Animal (except Poultry)
Slaughtering
311612 Meat Processed from
Carcasses

311613 Rendering and Meat By-product
Processing
311615 Poultry Processing
31171