Swine Facility Improvement Credit

INCOME TAXPAYER-Effective for all taxable years beginning after Dec. 31, 1997.

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.

Any taxpayer who makes improvements to a qualified swine facility is allowed a credit against their income tax liability.

Qualifications

The taxpayer must make improvements to a qualified swine facility.

The required improvements to a qualified swine facility must be certified by the Secretary of Health and Environment. For information about swine facility improvements or certification, contact:

Kansas Department of Health and Environment
Bureau of Water
Building 283-Forbes Field
Topeka, KS 66620-0001
785-296-0077

Credit Amount

The credit is 50 percent of the costs incurred by a taxpayer for required improvements to a qualified swine facility.

Limitation of Credit

The amount of credit which exceeds the tax liability may be carried forward to the next four years or until used, whichever is earlier.

Procedures to Claim the Credit

You may download Schedule K-38 to claim the swine facility improvement credit. The 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-38. 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 Swine Facility

A qualified swine facility is a swine facility that is using its swine waste management system on Jan. 1, 1998 and is owned and operated by a sole proprietorship or partnership or by a family farm corporation, authorized farm corporation, limited liability agricultural company, family farm limited liability agricultural company, limited agricultural partnership, family trust, authorized trust or testamentary trust as defined by K.S.A. 17-5903.

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Required Improvements to a Qualified Swine Facility

Required improvements to a qualified swine facility are those capital improvements that the Secretary of Health and Environment has certified to the director of taxation as required for the facility to comply with the laws regulating the management and disposal of swine waste, and are not necessary merely as the result of an expansion for which a permit had not been issued or applied for prior to July 1, 1998.

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Swine Facility

Swine facility means a confined feeding facility for swine. Confined feeding facility means any lot, pen, pool or pond:

  • which is used for the confined feeding of animals or fowl for food, fur or pleasure purposes;
  • which is not normally used for raising crops; and
  • in which no vegetation intended for animal food is growing.

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Swine Waste Management System

Swine waste management system means all constructed, excavated or natural receptacles used for the collection, conveyance, storage or treatment of manure or wastewater, or both, from a swine facility, including swine containment buildings.

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Family Farm Corporation

Family farm corporation means a corporation:

  • founded for the purpose of farming and the ownership of agricultural land in which the majority of the voting stock is held by and the majority of the stockholders are persons related to each other, all of whom have a common ancestor within the third degree of relationship, by blood or by adoption, or the spouses or the stepchildren of any such persons, or persons acting in a fiduciary capacity for persons so related;
  • all of its stockholders are natural persons or persons acting in a fiduciary capacity for the benefit of natural persons; and
  • at least one of the stockholders is a person residing on the farm or actively engaged in the labor or management of the farming operation. A stockholder who is an officer of any corporation and who is one of the related stockholders holding a majority of the voting stock shall be considered actively engaged in the management of the farming corporation. If only one stockholder is meeting the requirement of this provision and the stockholder dies, the requirement of this provision does not apply for the period of time that the stockholder's estate is being administered in any district court in Kansas.

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Authorized Farm Corporation

Authorized farm corporation means a Kansas corporation, other than a family farm corporation, all of the incorporators of which are Kansas residents, family farm corporations or family farm limited liability agricultural companies or any combination of these, and which is founded for the purpose of farming and the ownership of agricultural land in which:

  • the stockholders do not exceed 15 in number; and
    the stockholders are all natural persons, family farm corporations, family farm limited liability agricultural companies or persons acting in fiduciary capacity for the benefit of natural persons, family farm corporations, family farm limited liability agricultural companies or nonprofit corporations; and
  • if all of the stockholders are natural persons, at least one stockholder must be a person residing on the farm or actively engaged in labor or management of the farming operation. If only one stockholder is meeting the requirement of this provision and the stockholder dies, the requirement of this provision does not apply for the period of time that the stockholder's estate is being administered in any district court in Kansas.

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Limited Liability Agricultural Company

Limited liability agricultural company means a limited liability company founded for the purpose of farming and ownership of agricultural land in which:

  • the members do not exceed 10 in number;
  • and the members are all natural persons, family farm corporations, family farm limited liability agricultural companies, persons acting in a fiduciary capacity for the benefit of natural persons, family farm corporations, family farm limited liability agricultural companies or nonprofit corporations, or general partnerships other than corporate partnerships formed under the laws of the state of Kansas;
  • and if all of the members are natural persons, at least one member must be a person residing on the farm or actively engaged in labor or management of the farming operation. If only one member is meeting the requirement of this provision and the member dies, the requirement of this provision does not apply for the period of time that the member's estate is being administered in any district court in Kansas.

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Family Farm Limited Liability Agricultural Company

Family farm limited liability agricultural company means a limited liability company founded for the purposes of farming and ownership of agricultural land in which:

  • the majority of the members are persons related to each other, all of whom have a common ancestor within the third degree of relationship, by blood or by adoption, or the spouses or the stepchildren of any such persons, or persons acting in a fiduciary capacity for persons so related;
  • the members are natural persons or persons acting in a fiduciary capacity for the benefit of natural persons; and
  • at least one of the members is a person residing on the farm or actively engaged in the labor or management of the farming operation. If only one member is meeting the requirement of this provision and the member dies, the requirement of this provision does not apply for the period of time that the member's estate is being administered in any district court in Kansas.

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Limited Agricultural Partnership

Limited agricultural partnership means a limited partnership founded for the purpose of farming and ownership of agricultural land in which:

  • the partners do not exceed 10 in number;
  • the partners are all natural persons, persons acting in a fiduciary capacity for the benefit of natural persons or nonprofit corporations, or general partnerships other than corporate partnerships formed under the laws of the state of Kansas; and
  • at least one of the general partners is a person residing on the farm or actively engaged in the labor or management of the farming operation. If only one partner is meeting the requirement of this provision and the partner dies, the requirement of this provision does not apply for the period of time that the partner's estate is being administered in any district court in Kansas.

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Family Trust

Family trust means a trust in which:

  • a majority of the equitable interest in the trust is held by and the majority of the beneficiaries are persons related to each other, all of whom have a common ancestor within the third degree of relationship, by blood or by adoption, or the spouses or stepchildren of any such persons, or persons acting in a fiduciary capacity for persons so related; and
  • all the beneficiaries are natural persons, are persons acting in a fiduciary capacity, other than as trustee for a trust, or are nonprofit corporations.

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Authorized Trust

Authorized trust means a trust other than a family trust in which:

  • the beneficiaries do not exceed 15 in number;
  • the beneficiaries are all natural persons, are persons acting in a fiduciary capacity, other than as trustee for a trust, or are nonprofit corporations; and
  • the gross income from the trust is not exempt from taxation under the laws of either the United States or the state of Kansas.
    For purposes of this definition, if one of the beneficiaries dies, and more than one person succeeds, by bequest, to the deceased beneficiary's interest in the trust, all of the persons, collectively, shall be deemed to be one beneficiary, and a husband and wife, and their estates, collectively, shall be deemed to be one beneficiary.

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Testamentary Trust

Testamentary trust means a trust created by devising or bequeathing property in trust in a will as the terms are used in the Kansas probate code.

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