Environmental Compliance Credit

INCOME TAXPAYER-Effective for all taxable years commencing after Dec. 31, 2006.

Beginning in tax year 2013, this credit shall only be available to corporations that are subject to the Kansas corporate income tax, i.e. C corporations. This credit shall not be available to individuals, partnerships, S corporations, limited liability companies, and other pass-through entities.

An income taxpayer that makes qualified expenditures for an existing refinery to comply with environmental standards shall be allowed a tax credit.

Qualifications

A taxpayer shall apply to the Secretary of Health and Environment for a “certificate of compliance” that the costs were incurred to comply with environmental standards or requirements.

Credit Amount

The credit is equal to the taxpayer’s qualified expenditures.

Limitation of Credit

If the amount of the credit exceeds the taxpayer’s tax liability in any one taxable year, the remaining portion of the credit may be carried forward until the total amount of the credit is used, except that no such tax credit shall be carried over for deduction after the fourth taxable year succeeding the year in which the costs were incurred.

Procedures to Claim the Credit

You may download Schedule K-81 to claim the environmental compliance credit.  This schedule must be completed and submitted with the income tax return.  You may also call the Department of Revenue voice mail system at 785-296-4937 to request Schedule K-81.  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.

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Qualified Expenditures

Expenditures which the secretary of health and environment certifies to the director of taxation are required for an existing refinery to comply with environmental standards or requirements established pursuant to federal statute or regulation, or state statute or rules and regulations, adopted after Dec. 31, 2006.

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Refinery

A refinery has the meaning provided by K.S.A. 79-32,217 (see definition below), and amendments thereto.

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K.S.A. 79-32,217

A refinery is an industrial process plant, located in this state, where crude oil is processed and refined into petroleum products.

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