Can Kansas banks and other financial institutions now claim the expensing deduction?

Plain-English summary

Kansas Notice 14-10 (July 1, 2014) extends the Kansas expensing deduction to banks and other financial institutions.

The change. 2014 House Bill 2057 (Section 7) amended K.S.A. 79-32,143a, which provides an expense deduction (Kansas's accelerated cost-recovery/expensing deduction). Before the change, subsection (h) limited the deduction to taxpayers subject to the corporate income tax.

As amended (subsection (h)).

• For tax year 2013 and later, the deduction is available to taxpayers subject to the corporate income tax under K.S.A. 79-32,110(c), used to determine corporate income tax liability.
• For tax year 2014 and later, the deduction is also available to taxpayers subject to the privilege tax imposed on any national banking association, state bank, savings bank, trust company or savings and loan association under article 11 of chapter 79, and may be used to determine either corporate income or privilege tax liability.

What this means for you

Banks and other financial institutions

• Starting in tax year 2014, you can claim the K.S.A. 79-32,143a expensing deduction against your Kansas privilege tax liability.

Corporate taxpayers

• The deduction remains available against corporate income tax as before.

Common questions

Who newly qualifies? National banking associations, state banks, savings banks, trust companies and savings and loan associations subject to the privilege tax.

When does the extension start? Tax year 2014 and later.

Against which tax can it be used? Corporate income tax or privilege tax, depending on the taxpayer.

What statute changed? K.S.A. 79-32,143a(h), amended by Section 7 of 2014 House Bill 2057.

Citations and references

• K.S.A. 79-32,143a -- the Kansas expense (expensing) deduction; subsection (h) amended to add privilege-tax filers.
• K.S.A. 79-32,110(c) -- the corporate income tax referenced in the deduction limit.
• 2014 House Bill 2057, Section 7 -- the amending legislation.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: Notice 14-10

Original ruling text

Policy & Research Phone: 785-296-3081
915 SW Harrison St FAX: 785-296-7928
Topeka KS 66612-1588 www.ksrevenue.org
Nick Jordan, Secretary Department of Revenue Sam Brownback, Governor
Richard Cram, Director

                                      Notice 14-10

                Expensing Deduction Available To Financial Institutions

                                     (July 1, 2014)

  During the 2014 Legislative Session House Bill 2057 was passed and signed into law.

Section 7 of the Bill amends K.S.A. 79-32,143a, which provides for an expense deduction, to
permit certain financial institutions to claim the deduction against bank privilege tax liability.

  Prior to enactment of this Bill the expense deduction found in K.S.A. 79-32,143a was only

available to taxpayers subject to the income tax on corporations. This limitation was found in
subsection (h) of the statute. Subsection (h) has been amended, effective for tax year 2014 and
subsequent years, and now provides:

       (h) (1) For tax year 2013, and all tax years thereafter, the deduction allowed by
 this section shall only be available to taxpayers subject to the income tax on
 corporations imposed pursuant to subsection (c) of K.S.A. 79-32,110, and
 amendments thereto, and used only to determine such taxpayer's corporate income
 tax liability.
       (2) For tax year 2014, and all tax years thereafter, the deduction allowed by
 this section shall only be available to taxpayers subject to the income tax on
 corporations imposed pursuant to subsection (c) of K.S.A. 79-32,110, and
 amendments thereto, or the privilege tax imposed upon any national banking
 association, state bank, savings bank, trust company or savings and loan association
 pursuant to article 11 of chapter 79 of the Kansas Statutes Annotated, and
 amendments thereto, and used only to determine such taxpayer's corporate income or
 privilege tax liability.

                                 Taxpayer Assistance

Additional copies of this notice, forms or publications are available from our web site,
www.ksrevenue.org. If you have questions about this Notice, please contact:

                              Taxpayer Assistance Center
                             Kansas Department of Revenue
                             915 SW Harrison St., 1st Floor
                               Topeka, KS 66612-1588
                                 Phone: 785-368-8222
                                  Fax: 785-291-3614