Kansas Taxes, Credits and Exemptions - Kansas Department of Commerce
Source: https://www.kansascommerce.gov/businesses/taxes
Archived: 2026-04-23 17:22
Kansas Taxes, Credits and Exemptions - Kansas Department of Commerce
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Governor Kelly Announces Indra Group to Invest Nearly $7.5M to Manufacture Air Traffic Radars in Kansas
March 23, 2026
Gov. Kelly and Kansas City Chiefs Announce Agreement On Plans for State-of-the-Art Domed Stadium in Kansas
December 22, 2025
Governor Kelly Celebrates Grand Opening of Panasonic EV Battery Manufacturing Facility in De Soto
July 14, 2025
Governor Kelly Announces Grand Opening of Heartland Coca-Cola Olathe Production Campus
June 10, 2025
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Governor Kelly Visits Geoprobe, 2025 Exporter of the Year
Governor Laura Kelly visited Geoprobe Systems in Salina last Thursday to officially honor the company’s selection as the 2025 Governor’s Exporter of the Year.
Office of Broadband Announces $16.3 Million in New Grant Funding
Lieutenant Governor and Secretary of Commerce David Toland today announced $16.3 million is available to improve broadband infrastructure through the Broadband Acceleration Grant (BAG) program.
Spring Into a New Career at KANSASWORKS Virtual Statewide Job Fair
Lieutenant Governor and Secretary of Commerce David Toland encourages jobseekers and employers searching for available talent to take part in this month’s Virtual Statewide Job Fair.
Kansas Commerce Selects Third Round of Rural Champions
Lieutenant Governor and Secretary of Commerce David Toland today announced that the Department of Commerce has selected the third cohort of Rural Champions to solve pressing needs in their local communities.
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Taxes, Credits and Exemptions
Taxes, Credits and Exemptions
Creating a climate for business growth
The tax environment in Kansas is designed to be fair and favorable to your business. Our tax base ensures that no single industry is disproportionately burdened, and tax credits and exemptions are helping to lower the cost of doing business in Kansas.
No matter the industry, Kansas is dedicated to saving companies money and providing a pro-growth environment for business.
Corporate Income Tax
For corporations whose business income is solely within state boundaries, the tax is 4% of net income. In addition, net income in excess of $50,000 is subject to a 3% percent surtax. For those corporations with business income both inside and outside the state, the net income attributed to the Kansas operation is based upon the percentage of the corporation’s business located in Kansas. A business’ tax obligation is determined by a three-factor formula using the proportion of sales, property and payroll in Kansas compared to total sales, property and payroll.
Learn More
Tax Credits and Rebates
Alternative-fuel Tax Credit
Angel Investor Tax Credit
Corporate Income Tax Credit
Kansas Downtown Redevelopment Tax Rebate
Machinery and Equipment Expensing Deduction
Nitrogen Fertilizer Plant
Research and Development Tax Credit
Rural Opportunity Zone Credit
Swine Facility Improvement Credits
Disabled Access Credit
Entrepreneurship Tax Credit
Child Day Care Assistance Credit
Work Opportunity Tax Credit
Environmental Compliance Credit
Investment Tax Credit (HPIP)
Training and Education Tax Credit (HPIP)
Employer Health Insurance Contribution Credit
State Trade Expansion Program (STEP)
Aviation Tax Credits
Tax Exemptions
Agriculture Exemption
The following are eligible for agricultural exemption in Kansas: ingredient or component parts; parts consumed in production; propane for agricultural use; property purchased is farm or aquaculture machinery or equipment, repair/replacement parts, or labor services on farm or aquaculture machinery; seeds, fertilizers, insecticides, herbicides, germicides, pesticides, fungicides.
Biomass-to-Energy Plant Exemption and Deduction
A taxpayer may be entitled to a deduction from Kansas adjusted gross income of the amortizable costs of a new facility or expansion of an existing biomass-to-energy plant. The deduction is equal to 55 percent of the amortized costs of the facility for the first taxable year and five percent for the next nine taxable years.
Carbon Dioxide Capture/ Sequestration Exemption
A taxpayer is entitled to a deduction from Kansas adjusted gross income with respect to the amortizable costs of carbon dioxide capture, sequestration or utilization machinery and equipment over a period of 10 years.
Insurance Tax and Salary Tax Credit
The premium tax rate for domestic and foreign insurance companies doing business in Kansas is 2 percent. Kansas law KSA 40-252d provides for a tax credit for insurance companies equal to 15 percent of Kansas-based employees’ salaries, or up to a maximum of 1.125 percent of taxable premiums dependent on the company’s affiliation. The company can claim either the 15 percent credit or up to the 1.125 percent, whichever is less. This could make the effective tax rate on such companies as low as 0.875 percent and is an annual credit that is recalculated each year.
Learn More
Integrated Production Machinery and Equipment Exemption
K.S.A. 79-3606(kk)(1) exempts all sales of machinery and equipment used in Kansas as an integral or essential part of an integrated production operation by a manufacturing or processing plant or facility, all sales of installation, repair and maintenance services performed on such machinery and equipment; and all sales of repair and replacement parts and accessories for such machinery and equipment.
Interstate Common Carrier Exemption
K.A.R. 92-19-28 and K.A.R. 92-20-18 exempt the sale of rolling stock (including buses and trailers), repair or replacement materials and parts for rolling stock, gasoline, distillate and other motor fuels purchased for rolling stock when purchased by a motor carrier qualifying as a public utility, for immediate and direct use in interstate commerce.
Inventory Tax Exemption
All merchants’ and manufacturers’ inventories have been exempt from property taxes by constitutional amendment since 1989 (K.S.A. 79-201m). This exemption does not apply to public utility inventories.
Machinery and Equipment Property Tax Exemption
A state and local property tax exemption is available for new or used 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.
Real Property Tax Exemption
State law allows a 100% property tax abatement for 10 years on real property if industrial revenue bonds are used or if it qualifies under the state Constitution, which allows companies that manufacture articles of commerce, conduct research and development or store goods and commodities sold in commerce to receive a property tax abatement. Tax abatement on real property is offered by the city or county where the property is located.
Utilities Consumed in Production Exemption
The Kansas Utility Sales Tax Exemption allows businesses to claim an exemption on the portion of their utility that is consumed in the production, manufacturing, processing, mining, drilling, refining, compounding of tangible personal property or the providing of a taxable service.
Warehouse Machinery and Equipment Exemption
K.S.A. 79-3606(fff) exempts all sales of material handling equipment, racking systems and other related machinery and equipment used for the handling, movement or storage of tangible personal property in a warehouse or distribution facility in Kansas, all sales of installation, repair and maintenance services performed on such machinery and equipment; and all sales of repair and replacement parts for such machinery and equipment.
Property Tax Exemptions Renewable Energy Generation
Kansas offers a property tax exemption for projects producing electricity from renewable sources, including wind, solar, photovoltaic, biomass, hydropower, geothermal and landfill gas resources. The exemption applies to all property actually and regularly used in the generation of electricity from renewable sources, whether it is an industrial, commercial, utility or personal application.
Tax Exemptions via Industrial Revenue Bonds
Businesses using IRBs as a financing mechanism may enjoy certain tax exemptions on property finances with IRBs and the cost of construction labor, building materials and machinery and equipment.
Waste Heat Utilization System Exemption
The incentive offered is a deduction from Kansas adjusted gross income based on the amortized costs of a waste heat utilization system. The deduction shall be equal to 55 percent of the amortizable costs of the system for the first taxable year and 5 percent for the next nine years.
Any waste heat utilization system is exempt from all property taxes levied at the time of purchase and after or at the start of construction or installation of such property and for 10 years immediately following the taxable year in which construction or installation of such property is completed.
The Kansas Development Finance Authority is authorized to issue revenue bonds in amounts sufficient to finance the construction of waste heat utilization systems at electric generation facilities.
Property Tax
The rate of tax depends on the levy of the local taxing district and will vary within the state by location. There are several property tax exemptions that may be available to businesses for certain qualifying real and tangible personal property.
Learn More
Want to learn more about the location advantage Kansas provides your business?
Contact US
Business Resources
Incentives & Financing, Taxes, Credits & Exemptions, Site Selection, Doing Business in Kansas
Quality Places
Infrastructure assessment, community planning, development support, and downtown activation
Workforce Services
Find a Job, Job Seeker Services, Employer Services
TRAVEL KANSAS
Plan your trip to Kansas. Places to visit, things to do. Order a free Travel Guide.
International
Exporting Programs & Services, Investment, Reshoring
Transparency Database
Quality Places
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Careers
Federal Compliance
Sitemap
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All content © 2006-2026 Kansas Department of Commerce, KS and its representatives. All rights reserved.
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Business News
Governor Kelly Announces Indra Group to Invest Nearly $7.5M to Manufacture Air Traffic Radars in Kansas
March 23, 2026
Gov. Kelly and Kansas City Chiefs Announce Agreement On Plans for State-of-the-Art Domed Stadium in Kansas
December 22, 2025
Governor Kelly Celebrates Grand Opening of Panasonic EV Battery Manufacturing Facility in De Soto
July 14, 2025
Governor Kelly Announces Grand Opening of Heartland Coca-Cola Olathe Production Campus
June 10, 2025
View All
Business in Kansas
Quality of Life
Demographics
Skilled Workforce
Infrastructure
Incentives & Financing
Taxes, Credits, & Exemptions
Entrepreneurial Culture
Sites & Buildings
International
To The Stars: Kansas Business Awards
Key Industries
Advanced Manufacturing
Corporate & Professional Services
Logistics & Distribution
Food Processing and Manufacturing
Aerospace & Defense
Animal Health
Bioscience
Agriculture
Energy & Natural Resources
Publications
Initiatives & Incentives
Transparency Database
Chiefs in Kansas
Notices
Governor Kelly Visits Geoprobe, 2025 Exporter of the Year
Governor Laura Kelly visited Geoprobe Systems in Salina last Thursday to officially honor the company’s selection as the 2025 Governor’s Exporter of the Year.
Office of Broadband Announces $16.3 Million in New Grant Funding
Lieutenant Governor and Secretary of Commerce David Toland today announced $16.3 million is available to improve broadband infrastructure through the Broadband Acceleration Grant (BAG) program.
Spring Into a New Career at KANSASWORKS Virtual Statewide Job Fair
Lieutenant Governor and Secretary of Commerce David Toland encourages jobseekers and employers searching for available talent to take part in this month’s Virtual Statewide Job Fair.
Kansas Commerce Selects Third Round of Rural Champions
Lieutenant Governor and Secretary of Commerce David Toland today announced that the Department of Commerce has selected the third cohort of Rural Champions to solve pressing needs in their local communities.
View All
Our Department
Business Resources
Incentives & Financing, Taxes, Credits & Exemptions, Site Selection, Doing Business in Kansas
Quality Places
Infrastructure assessment, community planning, development support, and downtown activation
Workforce Services
Find a Job, Job Seeker Services, Employer Services
Travel Kansas
Plan your trip to Kansas. Places to visit, things to do. Order a free Travel Guide.
International
Exporting Programs & Services, Investment, Reshoring
Love, Kansas
Resources for your move to Kansas.
Athletic Commission
Broadband
Careers
Innovation
Kansas Arts Commission
News & Events
Programs & Services
Partners
Rural Prosperity
Kansas Small Business Office
Tourism
Publications
Initiatives & Incentives
Transparency Database
Chiefs in Kansas
Menu
Business
Regions
Made in Kansas
Our Department
Publications
Initiatives & Incentives
Transparency Database
Chiefs in Kansas
Notices
Contact
Back
Business in Kansas
Quality of Life
Demographics
Skilled Workforce
Infrastructure
Incentives & Financing
Taxes, Credits, & Exemptions
Entrepreneurial Culture
Sites & Buildings
International
To The Stars: Kansas Business Awards
Key Industries
Advanced Manufacturing
Corporate & Professional Services
Logistics & Distribution
Food Processing and Manufacturing
Aerospace & Defense
Animal Health
Bioscience
Agriculture
Energy & Natural Resources
Business News
Back
Our Department
Business Resources
Quality Places
Workforce Services
Travel Kansas
International
Love, Kansas
Athletic Commission
Broadband
Careers
Innovation
Kansas Arts Commission
News & Events
Programs & Services
Partners
Rural Prosperity
Kansas Small Business Office
Tourism
Home
/
Business
/
Taxes, Credits and Exemptions
Taxes, Credits and Exemptions
Creating a climate for business growth
The tax environment in Kansas is designed to be fair and favorable to your business. Our tax base ensures that no single industry is disproportionately burdened, and tax credits and exemptions are helping to lower the cost of doing business in Kansas.
No matter the industry, Kansas is dedicated to saving companies money and providing a pro-growth environment for business.
Corporate Income Tax
For corporations whose business income is solely within state boundaries, the tax is 4% of net income. In addition, net income in excess of $50,000 is subject to a 3% percent surtax. For those corporations with business income both inside and outside the state, the net income attributed to the Kansas operation is based upon the percentage of the corporation’s business located in Kansas. A business’ tax obligation is determined by a three-factor formula using the proportion of sales, property and payroll in Kansas compared to total sales, property and payroll.
Learn More
Tax Credits and Rebates
Alternative-fuel Tax Credit
Angel Investor Tax Credit
Corporate Income Tax Credit
Kansas Downtown Redevelopment Tax Rebate
Machinery and Equipment Expensing Deduction
Nitrogen Fertilizer Plant
Research and Development Tax Credit
Rural Opportunity Zone Credit
Swine Facility Improvement Credits
Disabled Access Credit
Entrepreneurship Tax Credit
Child Day Care Assistance Credit
Work Opportunity Tax Credit
Environmental Compliance Credit
Investment Tax Credit (HPIP)
Training and Education Tax Credit (HPIP)
Employer Health Insurance Contribution Credit
State Trade Expansion Program (STEP)
Aviation Tax Credits
Tax Exemptions
Agriculture Exemption
The following are eligible for agricultural exemption in Kansas: ingredient or component parts; parts consumed in production; propane for agricultural use; property purchased is farm or aquaculture machinery or equipment, repair/replacement parts, or labor services on farm or aquaculture machinery; seeds, fertilizers, insecticides, herbicides, germicides, pesticides, fungicides.
Biomass-to-Energy Plant Exemption and Deduction
A taxpayer may be entitled to a deduction from Kansas adjusted gross income of the amortizable costs of a new facility or expansion of an existing biomass-to-energy plant. The deduction is equal to 55 percent of the amortized costs of the facility for the first taxable year and five percent for the next nine taxable years.
Carbon Dioxide Capture/ Sequestration Exemption
A taxpayer is entitled to a deduction from Kansas adjusted gross income with respect to the amortizable costs of carbon dioxide capture, sequestration or utilization machinery and equipment over a period of 10 years.
Insurance Tax and Salary Tax Credit
The premium tax rate for domestic and foreign insurance companies doing business in Kansas is 2 percent. Kansas law KSA 40-252d provides for a tax credit for insurance companies equal to 15 percent of Kansas-based employees’ salaries, or up to a maximum of 1.125 percent of taxable premiums dependent on the company’s affiliation. The company can claim either the 15 percent credit or up to the 1.125 percent, whichever is less. This could make the effective tax rate on such companies as low as 0.875 percent and is an annual credit that is recalculated each year.
Learn More
Integrated Production Machinery and Equipment Exemption
K.S.A. 79-3606(kk)(1) exempts all sales of machinery and equipment used in Kansas as an integral or essential part of an integrated production operation by a manufacturing or processing plant or facility, all sales of installation, repair and maintenance services performed on such machinery and equipment; and all sales of repair and replacement parts and accessories for such machinery and equipment.
Interstate Common Carrier Exemption
K.A.R. 92-19-28 and K.A.R. 92-20-18 exempt the sale of rolling stock (including buses and trailers), repair or replacement materials and parts for rolling stock, gasoline, distillate and other motor fuels purchased for rolling stock when purchased by a motor carrier qualifying as a public utility, for immediate and direct use in interstate commerce.
Inventory Tax Exemption
All merchants’ and manufacturers’ inventories have been exempt from property taxes by constitutional amendment since 1989 (K.S.A. 79-201m). This exemption does not apply to public utility inventories.
Machinery and Equipment Property Tax Exemption
A state and local property tax exemption is available for new or used 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.
Real Property Tax Exemption
State law allows a 100% property tax abatement for 10 years on real property if industrial revenue bonds are used or if it qualifies under the state Constitution, which allows companies that manufacture articles of commerce, conduct research and development or store goods and commodities sold in commerce to receive a property tax abatement. Tax abatement on real property is offered by the city or county where the property is located.
Utilities Consumed in Production Exemption
The Kansas Utility Sales Tax Exemption allows businesses to claim an exemption on the portion of their utility that is consumed in the production, manufacturing, processing, mining, drilling, refining, compounding of tangible personal property or the providing of a taxable service.
Warehouse Machinery and Equipment Exemption
K.S.A. 79-3606(fff) exempts all sales of material handling equipment, racking systems and other related machinery and equipment used for the handling, movement or storage of tangible personal property in a warehouse or distribution facility in Kansas, all sales of installation, repair and maintenance services performed on such machinery and equipment; and all sales of repair and replacement parts for such machinery and equipment.
Property Tax Exemptions Renewable Energy Generation
Kansas offers a property tax exemption for projects producing electricity from renewable sources, including wind, solar, photovoltaic, biomass, hydropower, geothermal and landfill gas resources. The exemption applies to all property actually and regularly used in the generation of electricity from renewable sources, whether it is an industrial, commercial, utility or personal application.
Tax Exemptions via Industrial Revenue Bonds
Businesses using IRBs as a financing mechanism may enjoy certain tax exemptions on property finances with IRBs and the cost of construction labor, building materials and machinery and equipment.
Waste Heat Utilization System Exemption
The incentive offered is a deduction from Kansas adjusted gross income based on the amortized costs of a waste heat utilization system. The deduction shall be equal to 55 percent of the amortizable costs of the system for the first taxable year and 5 percent for the next nine years.
Any waste heat utilization system is exempt from all property taxes levied at the time of purchase and after or at the start of construction or installation of such property and for 10 years immediately following the taxable year in which construction or installation of such property is completed.
The Kansas Development Finance Authority is authorized to issue revenue bonds in amounts sufficient to finance the construction of waste heat utilization systems at electric generation facilities.
Property Tax
The rate of tax depends on the levy of the local taxing district and will vary within the state by location. There are several property tax exemptions that may be available to businesses for certain qualifying real and tangible personal property.
Learn More
Want to learn more about the location advantage Kansas provides your business?
Contact US
Business Resources
Incentives & Financing, Taxes, Credits & Exemptions, Site Selection, Doing Business in Kansas
Quality Places
Infrastructure assessment, community planning, development support, and downtown activation
Workforce Services
Find a Job, Job Seeker Services, Employer Services
TRAVEL KANSAS
Plan your trip to Kansas. Places to visit, things to do. Order a free Travel Guide.
International
Exporting Programs & Services, Investment, Reshoring
Transparency Database
Quality Places
Broadband
Careers
Federal Compliance
Sitemap
․
Accessibility
․
Privacy Policy
․
Cookie Policy
․
Terms of Use
․
All content © 2006-2026 Kansas Department of Commerce, KS and its representatives. All rights reserved.
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Website by Imagemakers
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This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
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Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
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Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
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