Kansas Corporate Income Tax

Corporate income tax is 4.00 percent of Kansas taxable net income plus 3.35 percent surtax on taxable net income in excess of $50,000 (marginal rate 7.35 percent). Only the proportion of net income generated within the state is subject to Kansas income tax. A three-factor formula relating sales, payroll and property to the Kansas facility is generally used to determine Kansas taxable net income. With prior approval, a two-factor formula (sales and property) may be elected if the payroll factor exceeds 200 percent of the average of the sales factor and property factor values in the state. Such an election is binding for 10 years.

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Unemployment Insurance

Rates apply to the first $8,000 of each employee's annual wages. The year 2008 new employer rate is 6.00% for the construction sector and 4.00% for all other sectors. Employers qualify for experience rating after 3 years of operation. The 2008 experience rate range for positive balance employers is 0.00% to 4.92% based entirely on experience rating. Year 2008 experience rates for negative balance employers range from 5.60% to 7.40%.

Unemployment Insurance Rate Table

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Workers' Compensation

Workers' compensation premiums are determined by applying the rate for a specific occupation, per $100 of payroll, to the annual wage per employee. Businesses can obtain workers' compensation insurance from private insurance companies or, upon application, become self-insured. A workers' compensation pool, the Kansas Employers Workers Compensation Fund, is available for qualified companies. For more information and specific occupation rates, contact Patricia Songer of Midland Management toll-free at (888) 799-5712.

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Retail Sales and Use Tax

Sales tax exemptions apply to both State and County tax and include (with prior application):

• Business machinery and equipment
• Pollution control equipment
• Maintenance and repair of exempt machinery and equipment
• Manufacturing raw materials and utilities consumed in production
• Construction materials
• Prepackaged business software

Click here for more information and to download project and utility sales tax exemption application forms.

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Telecommunications Sales Tax

Both local telephone calls and long distance calls (intrastate and interstate) are subject to 5.3 percent State sales tax and 1.0 percent Sedgwick County sales tax. Non-WATS* "800" number calls (both intrastate and interstate) are taxed in exactly the same fashion as numbers with other prefixes. There are no State of Kansas, Sedgwick County or City of Wichita taxes specific to "800" numbers. The only difference is that "800" prefix numbers incur no charge to the caller. Interstate WATS telephone service (including WATS-based "800" service), dedicated lines and computer access service (data lines) are exempt from sales tax. WATS lines are declining technology. The majority of "800" service is not provided via (inward) WATS lines, and is therefore subject to sales tax.

*WATS = Wide Area Telephone Service

Long distance service provided by various carriers that includes both intrastate and interstate service for outgoing and incoming (800) calls. WATS provides a bulk savings plan for companies with a high volume of toll calls, such as telemarketing. WATS charges include a flat rate for each hour of calling time, with cost per hour decreasing as toll usage increases.

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Corporate Franchise Tax

Kansas corporate franchise tax is $1.25 per $1,000 annually of shareholder's equity or net worth attributable to Kansas (maximum of $20,000), payable to the Kansas Department of Revenue. An exemption is provided for entities with equity or net worth of $100,000 or less (effective for tax year 2004). In addition, a franchise fee of $55 (for-profits) or $40 (non-profties) is payable to the Kansas Secretary of State.

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Motor Fuels

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Personal Income Tax

Married filing jointly

All other individuals

Standard Deductions

Kansas allows personal exemptions of $2,250 for each personal exemption allowed under federal income tax laws. An additional exemption is allowed in Kansas if you file as head of household on a federal return.

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Property Tax

Effective July 2, 2006: Business machinery and equipment newly purchased, leased or moved into Kansas is exempt from property tax. This is of particular benefit to capital-intensive manufacturing operations.

The exemption applies equally to manufacturing equipment and office business equipment, furniture and fixtures. Items of business personal property under $1,500 original purchase price are also exempt from property tax regardless of date of purchase.

Effective January 1, 1989: Business inventories (raw materials, goods-in-process and finished goods) are exempt from property tax.

Assesment Percentages

Ad valorem tax mill levies for City of Wichita

(dollars per $1,000 of assessed value)

Residence example: assuming house with an appraised value of $150,000

• Divide by $1,000 - 17.25
• Mutiply 17.25 by the mill levy: 17.25 x 116.064 = $2,002.10 (annual property tax)

Business inventories (raw materials, goods-in-process and finished goods) are exempt from property tax. New stand-alone business-use items under $400 original retail purchase price are also exempt from property tax.

1. Not all mill levy components apply to motor vehicles. Contact the Sedgwick County Appraiser's Office at (316) 383-8200 for property tax quotes covering specific year/make/model vehicles.

2. Wichita Unified School District #259 (includes facility improvement bonds - 6.974 mills)

Vehicle Property Tax & Fee Estimator

Business example: property tax on $100,000 (appraised value) of commercial property. Business machinery & equipment acquired after June 30, 2006 is exempt from property tax
Assessment percentage of commercial-industrial real estate = 25%.
Total mill levy in most areas of Wichita = 116.064 mills (dollars per $1,000 assessed value).

• Divide by $1,000 = 25
• Multiply 25 by the mill levy: 25 x 116.064 = $2,901.60 (annual property tax) - Equivalent to 2.90160% of appraised market value or $29.016 per $1,000 of appraised value.

Mill levies vary by location - for levies at specific locations contact the Sedgwick County Clerk's Office

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