In this section
Tax & Incentive Profile
Property Tax Exemptions
INFORMATION FOR BOTH KANSAS AND MISSOURI IS PRESENTED BELOW.
Exemption of Property for Economic Development Purposes
Counties and cities may exempt from ad valorem taxation all or any portion of the appraised value of all buildings, or added improvements, together with the land upon which such buildings are located, and all associated tangible personal property used exclusively by a business for:
The property must be associated with a business which is new to a county, and if the property was already in Kansas prior to the exemption, the city or county must make a determination that if not for the exemption, Kansas would have lost jobs. Additions to or expansions of existing buildings qualify for the property tax exemptions, if, as a result of the expansion, new jobs are created.
Total or partial ad valorem tax exemption may be in effect for up to 10 years after the calendar year in which a business commences its operations or an expansion is completed.
Machinery & Equipment Personal Property Tax Exemption
Commercial and industrial machinery and equipment acquired by qualified purchase or lease, or transferred into the state, for the purpose of expanding an existing facility or establishing a new facility is exempt from state and local property tax. This exemption covers:
Businesses Using Industrial Revenue Bonds
Property financed with Industrial Revenue Bonds (IRBs) is exempt from ad valorem taxation for up to 10 years after the bonds are issued. However, localities may elect to negotiate "payments in lieu of taxes."
All merchants' and manufacturers' inventories are exempt from property taxes by constitutional amendment.
Intangible property taxes are local taxes levied by counties, cities, and townships. The law permits a tax of 3% or less on the income derived from intangible property. However, counties, cities, and townships have the option of reducing or eliminating the tax. The six Kansas counties in the metropolitan area have eliminated their shares of the tax, and most cities in those counties have eliminated all or part of the tax.
Enhanced Enterprise Zone Property Tax Benefits
The Enhanced Enterprise Zone is a discretionary program offering state tax credits to Enhanced Business Enterprises. Tax credits may be provided each year for up to five (5) tax years after the project commences operations. To receive benefits, the facility must create at least two new jobs and $100,000 in new investment. Eligible investment expenditures include the original cost of machinery, equipment, furniture, fixtures, land and building, and/or eight (8) times the annual rental rate paid for the same.
Manufacturer's inventories including raw materials, goods in process and finished goods, as well as goods and wares of retailers, distributors, and wholesalers are exempt from all state and local property taxes.
Urban Redevelopment Corporations
Missouri promotes urban redevelopment through a potential 25-year ad valorem tax incentive program known as Chapter 353. Any city (there is no size restriction) may establish an Urban Redevelopment Corporation to redevelop areas designated as blighted due to age, obsolescence, or physical deterioration. Under the program, up to 100% of improvements to real property may be exempt from state and local property taxes for up to 25 years.
Industrial Revenue Bonds
Cities or counties are authorized, by a program known as Chapter 100, to issue industrial revenue bonds (revenue or general obligation) which may offer an opportunity to abate property taxes. It may be possible to exempt most of the real and personal property tax of buildings and machinery financed by a Chapter 100 bond if the city or county owns the property financed by the bonds. In this case, the company would lease the assets from the city for the term of the bonds. The amount of exemption depends on the structure of the lease, the residual value at the end of the lease, and the interpretation of the statutes by the county assessor of leasehold value. The Missouri Development Finance Board (MDFB) also has the ability to issue tax-exempt or taxable bonds. The MDFB cannot issue general obligation bonds, but it can exempt property taxes under the same method as Chapter 100.
In addition to the Brownfield Redevelopment Program's income tax and financing benefits, the program allows for the abatement of local real property taxes. The term of the benefits (not to exceed 20 years) and the percent of abatement (up to 100% and based on improvements made to real property) are determined at the discretion of the local authorities.
DEFINING THE GREATER KC METRO AREA
Kansas City is a Missouri/Kansas bi-state metropolitan area. All statistical references made to Kansas City Metropolitan Statistical Area (MSA) include the counties of Bates, Caldwell, Cass, Clay, Clinton, Jackson, Lafayette, Platte and Ray in Missouri, and Franklin, Johnson, Leavenworth, Linn, Miami and Wyandotte counties in Kansas. The greater Kansas City area also includes the adjoining Lawrence, KS, St. Joseph, MO, and Topeka, KS MSAs, as well as the Atchison, KS, Chillicothe, MO, Ottawa, KS, and Warrensburg, MO areas.