Session of 2024
SENATE BILL No. 329
By Senator Holland
12-14
AN ACT concerning economic development; relating to the Kansas angel
investor tax credit act; discontinuing issuance of new tax credits after
2024; amending K.S.A. 2023 Supp. 74-8133 and repealing the existing
section.
Be it enacted by the Legislature of the State of Kansas:
Section 1. K.S.A. 2023 Supp. 74-8133 is hereby amended to read as
follows: 74-8133. (a) A credit against the tax imposed by article 32 of
chapter 79 of the Kansas Statutes Annotated, and amendments thereto, on
the Kansas taxable income of an angel investor and against the tax
imposed by K.S.A. 40-252, and amendments thereto, shall be allowed for
a cash investment in the qualified securities of a qualified Kansas business.
For tax year 2021 and all tax years thereafter as provided by this section,
the credit shall be in a total amount of up to 50% of such investors' cash
investment in any qualified Kansas business, subject to the limitations set
forth in subsection (b). This tax credit may be used in its entirety in the
taxable year in which the cash investment is made except that no tax credit
shall be allowed in a year prior to January 1, 2005. If the amount by which
that portion of the credit allowed by this section exceeds the investors'
liability in any one taxable year, beginning in the year 2005, the remaining
portion of the credit may be carried forward until the total amount of the
credit is used, except that any credit or portion of a credit remaining after
the tax year ending on December 31, 2028, shall not be carried forward
but shall be forfeited. If the investor is a permitted entity investor, the
credit provided by this section shall be claimed by the owners of the
permitted entity investor in proportion to their ownership share of the
permitted entity investor.
(b) For tax year 2021 and all tax years thereafter as provided by this
section, the secretary of revenue shall not allow tax credits of more than
$100,000 for a single Kansas business or a total of $350,000 in tax credits
for a single year per investor who is a natural person or owner of a
permitted entity investor. No tax credits authorized by this act shall be
allowed for any cash investments in qualified securities for any year after
the year 2026 2024. The total amount of tax credits that may be allowed
under this section shall not exceed:
(1) $4,000,000 during the tax year 2007;
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(2) $6,000,000 for tax years 2008 through 2010 and 2012 through
2022, except that for tax year 2011, the total amount of tax credits that
may be allowed under this section shall not exceed $5,000,000;
(3) $6,500,000 for tax year 2023; and
(4) $7,000,000 for tax year 2024;
(5) $7,500,000 for tax year 2025; and
(6) $8,000,000 for tax year 2026.
The balance of unissued tax credits may be carried over for issuance in
future years until tax year 2026 2024.
(c) A cash investment in a qualified security shall be deemed to have
been made on the date of acquisition of the qualified security, as such date
is determined in accordance with the provisions of the internal revenue
code.
(d) Any investor without a current tax liability at the time of the
investment in a qualified Kansas business, who does not reasonably
believe that it will owe any such tax for the current taxable year and who
makes a cash investment in a qualified security of a qualified Kansas
business shall be deemed to acquire an interest in the nature of a
transferable credit limited, for tax year 2021 and all tax years thereafter as
provided by this section, to an amount up to 50% of this cash investment.
This interest may be transferred to any natural person whether or not such
person is then an investor and be claimed by the transferee as a credit
against the transferee's Kansas income tax liability beginning in the year
provided in subsection (a). No person shall be entitled to a refund for the
interest created under this section. Only the full credit for any one
investment may be transferred and this interest may only be transferred
one time. A credit acquired by transfer shall be subject to the limitations
prescribed in this section. Documentation of any credit acquired by
transfer shall be provided by the investor in the manner required by the
director of taxation. No transfers of tax credits shall be allowed after
December 31, 2028. Any transferred credit or portion of a transferred
credit remaining after the tax year ending on December 31, 2028, shall
not be carried forward by the transferee but shall be forfeited.
(e) The reasonable costs of the administration of this act, the review
of applications for certification as qualified Kansas businesses and the
issuance of tax credits authorized by this act shall be reimbursed through
fees paid by the qualified Kansas businesses and the investors or the
transferees of investors, according to a reasonable fee schedule adopted by
the secretary by rules and regulations in accordance with the rules and
regulations filing act.
Sec. 2. K.S.A. 2023 Supp. 74-8133 is hereby repealed.
Sec. 3. This act shall take effect and be in force from and after its
publication in the statute book.
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