State Historic Rehabilitation Tax Credit
Overview
The Kansas Historic Rehabilitation Tax Credit was created in 2001 and since that time the program has generated over $1 Billion dollars in investment in historic buildings throughout Kansas.
From July 2021 through June 2022 (State Fiscal Year 2022). There was $112 Million in investment in historic tax credit projects using the State Tax Credit Program. This one year of investment generated 1,683 jobs, and an economic output of $122 Million.
The State Tax Credit Program provides a credit equal to a percentage of your qualified expenses on the project. As of July 1, 2022, the percentage awarded is based upon the population of the city or township that the property is located within. The table below describes credit percentage breakdown.
Already familar and ready to start the applications click HERE
The requirements to participate in the State Tax Credit Program
The work must be done to a listed building
The property must be listed on the State or National Register before an application is submitted
To check and see if your property is listed click HERE
The work must be done to a structure determined to be a building (no site work, landscaping, work outside of the footprint of the building).
The qualified expenses must be paid by the owner of the building and must add up to more than $5,000
Only property owners of the building or long-term leasees are may receive the credits
Insurance proceeds, grant money and any other money not charged to a capital account, may not be counted towards the qualified project total.
Multiple projects may be combined to reach the minimum requirement.
See examples of qualifying and non-qualifying expenditures.
The application must be submitted BEFORE work begins.
All work must meet the Secretary of the Interior's Standards for Rehabilitation
The project must be reviewed before the work starts to ensure that the work meets The Standards
If ANY portion of the project work does NOT meet the Standards for Rehabilitation no credits will be awarded for the entire project.
In case of building or project emergencies, please email the tax credit email for help kshs.taxcredits@ks.gov or call 785-272-8681 ext. 240.
How to use the Credits
Credits will be issued based upon the total spent on qualified costs for the project. The Part 3 application, photographs, and audit forms are submitted to the SHPO office, once a complete application is submitted it will be reviewed. If the work meets the Secretary of the Interior's Standards for Rehabilitation then the project is approved by the SHPO office. Upon approval a certificate is then issued to the owner with the credit amount. These credits can be used by the owner in several different ways
The credits may be used to offset the Kansas Income Taxes of the property owner.
The credits may be carried forward 10 years from the completion date
The credits may be claimed using the K-35 form on their Kansas Taxes
Please contact a tax professional for advice on how to utilize these credits.
The credits may be sold or transferred to any potential buyer. It is up to the seller to find a buyer for the credits. Contact the SHPO office for a list of potential buyers that have asked to have their info shared with potential tax credit sellers.
More information can be found in Guidebook for Transferring Kansas State Rehabilitation Tax Credits.
When a buyer has been found please complete and submit the Transfer Notification Forms to formalize transfers and ensure that tax credits will be available in the buyer's name.
Application Process
Please save application forms to your computer before filling them out.
Part 1—Qualified Historic Structure Certification (Please save the application form to your computer before filling it out.) - This one-page form is required if your building is located in a National Register or State Register Historic District. The form will be reviewed to verify that your building is a contributor to the character of the historic district. Please be sure to provide good photographs of the front elevation of your property.
Part 2—Qualified Rehabilitation Certification (Please save the application form to your computer before filling it out.) - This form is required for all applicants to certify that the proposed project will meet the Secretary of the Interior's Standards for Rehabilitation. The applicant should outline the building's existing condition and all proposed work on this form. Descriptions of work should include all work items, not just those listed as qualifying costs. Photographs showing all areas of proposed changes are required to accompany this form. If you are proposing major changes or you are using an architect, additional materials, such as drawings, may be required. The SHPO staff will review the application and materials to certify that all proposed work meets the Standards. The SHPO will advise applicants and provide technical assistance when needed. Work may begin on the proposed project only after this application has been approved by the SHPO.
Once you have an open project on file with the SHPO, any changes to the proposed scope of work must be submitted for approval to the tax review staff via an amendment form before those changes are implemented.
- Application Processing Fee—An application-processing fee is required for the SHPO to review state tax credit applications. Fees are based on the estimated dollar amount of qualified rehabilitation expenditures. Please submit the appropriate fee as noted below with your Part 2 application or as requested by SHPO staff. Fees may be paid via the online store; scroll to the bottom of the store's webpage and click "Tax Credits".
Qualified Expenditures Fee
$5,000 - $25,000 $200
$25,001 - $50,000 $350
$50,001 - $100,000 $500
$100,001 - $500,000 $900
$500,001 - $1,000,000 $1,500
over $1,000,000 $2,000
Part 3—Rehabilitation Completion Certification (Please save the application form to your computer before filling it out.) - This form must be submitted when all work has been completed. Photographs of the finished work must accompany the submission. Upon review and approval by the SHPO, applicants will receive a certificate verifying that they may claim 25 percent of their qualified expenses as credit toward their Kansas state income, privilege, or premiums taxes. Qualified expenses are generally those associated with the physical structure of the building, but other soft costs can be applied as well.
Claiming the Kansas State Tax Credit
When the rehabilitation work is complete applicants must submit Part 3 of the application along with Kansas Department of Revenue (KDOR) Schedules I and II. Contact the SHPO or click the following links for instructions and a checklist to help you complete the Schedules.
For non-profit organizations, local governments, and other property owners that do not have a Kansas state income tax liability, these credits may be transferred or sold to other taxpayers. The Guidebook for Transferring Kansas State Rehabilitation Tax Credits is helpful guide to the process. Please utilize the Transfer Notification Forms to formalize transfers and ensure that tax credits will be available in the buyer's name.
Please contact the SHPO for more information or application forms at 785-272-8681, ext. 240 or kshs.shpo@ks.gov.
