Could Kansas historic-preservation tax credits be divided among multiple assignees and transferred more than once?

Plain-English summary

A correspondent asked whether the Kansas historic-preservation income-tax credit enacted in section 31 of 2002 S.B. 39 could be transferred to multiple assignees and reassigned more than once.

The Department answered yes, subject to the statutory requirements. The taxpayer earning the credits could divide them and assign portions to different people. Those recipients could then assign the credits to other people.

The enacted language allowed “any person” designated as an assignor to sell, assign, convey, or otherwise transfer earned credits. An earlier bill version would have required transfer of the full credit and limited it to one transfer, but the legislature removed that restriction before enactment.

The Department therefore concluded that a later assignor did not have to be the individual or entity that originally earned the credit.

What this means for you

Historic-project owners

You could divide earned credits among multiple buyers or assignees under the statute interpreted in the opinion.

Credit purchasers

An assignee could transfer the credit again rather than being the final holder, subject to the statutory requirements.

Tax professionals

Document the chain of assignment and the amount transferred at each stage. The opinion permits repeated transfers but does not waive any other statutory condition.

Common questions

Q: Could the original owner split the credit among multiple assignees?
A: Yes. The Department expressly allowed portions to go to different people.

Q: Could an assignee transfer the credit again?
A: Yes. Historic-preservation credits could be transferred more than once.

Q: Did every assignor have to be the taxpayer that earned the credit?
A: No. A subsequent individual or entity could act as assignor.

Citations and references

• K.S.A. 2001 Supp. 79-32,211, as amended by 2002 S.B. 39, § 31(c) — historic-preservation credit transfers
• 2002 H.B. 2948, introduced version — removed one-transfer restriction discussed by the Department

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: O-2002-019

Original ruling text

Opinion Letter

Body:

Office of Policy & Research

August 22, 2002

XXXX
XXXX
XXXX

Re: Ruling Request re Kansas Historic Preservation Tax Credit--Transfers

Dear XXXX:

This letter responds to your correspondence dated August 12, 2002, in which you ask whether the historic preservation tax credit under section 31 of 2002 Senate Bill 39, may be transferred to more than one assignee more than one time.

Subsection (c) of section 31, 2002 Senate Bill 39 (amending K.S.A. 2001 Supp. 79-32,211) provides in part: “Any person, hereinafter designated the assignor, may sell, assign, convey or otherwise transfer tax credits allowed and earned pursuant to subsection (a).” You contend that the 2002 amendments do not limit the number of assignors or assignees, or the number of times assignments of such tax credits can be made. You note that 2002 House Bill 2948, as introduced, contained the following restriction in subsection (c), later removed from the enacted language: “Only the full credit amount for any one contribution may be transferred and such credit may be transferred one time.” This deletion infers legislative intent to allow tax credit transfers to occur more than one time. You also point out that subsection (c) states “any person” may assign or transfer the tax credits as assignor, meaning that the assignor could be someone other than the entity earning the tax credits.

The Department agrees that earned or allowed Kansas historic preservation tax credits may be transferred more than one time, subject to the statutory requirements. The person earning the tax credits can assign portions of those tax credits to different persons, and in turn, those persons can assign the tax credits to other persons. A subsequent assignor can be an individual or entity other than the one earning the tax credits.

Please let me know if you have any further questions.

Very truly yours,

Richard L. Cram

Date Composed: 08/26/2002 Date Modified: 08/26/2002

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