CheyenneRawlinsDecaturNorton PhillipsSmithJewellRepublicWashingtonMarshall Nemaha Brown Doniphan Atchison Jackson Pottawatomie Jefferson Leavenworth Wyandotte ShermanThomasSheridanGraham WallaceLogan GoveTrego GreeleyWichita ScottLaneNess Hamilton Stanton Morton Kearny Grant Stevens Finney Hodgeman Gray Haskell Seward Ford MeadeClark RooksOsborne Mitchell Cloud EllisRussell Rush Lincoln Ottawa Clay Barton Ellsworth Rice SalineDickinson McPherson Marion Pawnee Edwards Kiowa Comanche Stafford Pratt Barber Reno Kingman Harper Harvey Sedgwick Sumner Butler Cowley Riley Geary Morris Wabaunsee Chase Lyon Shawnee Douglas Osage Johnson Franklin Coffey Miami AndersonLinn Greenwood Elk Chautauqua Woodson Wilson Montgomery Labette Allen Neosho Bourbon Crawford Cherokee 2016 Kansas Community Service Tax Credits

CheyenneRawlinsDecaturNorton PhillipsSmithJewellRepublicWashingtonMarshall Nemaha Brown Doniphan Atchison Jackson Pottawatomie Jefferson Leavenworth Wyandotte ShermanThomasSheridanGraham WallaceLogan GoveTrego GreeleyWichita ScottLaneNess Hamilton Stanton Morton Kearny Grant Stevens Finney Hodgeman Gray Haskell Seward Ford MeadeClark RooksOsborne Mitchell Cloud EllisRussell Rush Lincoln Ottawa Clay Barton Ellsworth Rice SalineDickinson McPherson Marion Pawnee Edwards Kiowa Comanche Pratt Barber Reno Kingman Harper Harvey Sedgwick Sumner Butler Cowley Riley Geary Morris Wabaunsee Chase Lyon Shawnee Douglas Osage Johnson Franklin Coffey Miami AndersonLinn Greenwood Elk Chautauqua Woodson Wilson Montgomery Labette Allen Neosho Bourbon Crawford Cherokee 2015 vs. 2016

Agenda How do we select projects? How do they work & why? Tax Credit Process Eligible Contributions & Eligible Contributors Using the Tax Credit website Reporting, Responsibilities & Funding Gaps Questions

Rating Process 2 raters per application (low, high) 200 point scale per rater (400 possible points) Raters meet in day-long meeting to debate and defend scores, determine award sizes, and finalize awards

Rating Points RangeVolumeLowHigh

Purpose of Community Service Program Established in 1994, there are four main categories eligible: Community Service, Healthcare Services, Crime Prevention and Youth Apprenticeship/Job Training. Gives non-profit organizations a way to improve their ability to undertake major capital fundraising drives. $4.13 million allocated annually, this year $3,630,000.

What are tax credits? A direct reduction from the final tax obligation in the awarding jurisdiction (federal, state, local) Not the same as a deduction Better than a deduction Can be combined with a deduction in some circumstances (State Credit + Federal Deduction)

$87.5 Million in tax credits awarded… …has generated over… $151 Million for Healthcare and Community Service projects in Kansas.

Since 1995… $7.5 Million …has been donated by donors living or based outside of Kansas.

Donations that have helped fund… 11 Health clinics 68 Hospital expansions/ renovations 8 Mental health facilities 28 Nursing homes/ Assisted living facilities 18 Arts projects (Arts centers, theaters, etc.) 8 Wellness/ fitness projects 63 “Miscellaneous” Projects …since 2006

Majestic Community Theatre - Phillipsburg

Jay Johnson Public Library – Quinter

Kansas Children’s Discovery Center – Topeka

Olathe Cancer Center

Tax Credit Example $1000 Donation to CSP Project = $700 Tax Credit $500 Kansas Income Tax -$700 Credit __________ $200 Refund

Taxpayer donates $1000 to CSP Project CSP Project funds increase by $1000 Taxpayer receives either $500 or $700 tax credit CSP Project tax credit balance reduced by $500 or $700

Advantages of the Credits Refundable: If the tax credit is greater than tax credit liability, the tax filer receives a refund. Transferrable: The tax credit can be transferred from a donor not subject to any KS income tax to an entity that is subject. Must be for full amount.

Eligible Contributors Businesses subject to Kansas state income tax. Individuals subject to Kansas state income tax. Banks, savings, and trust companies paying and subject to annual tax on net income.

LLC’s, S-Corp, Sole Proprietorship No longer have Kansas income tax liability CAN claim the K-60 credit as it is refundable and they still file a return.

Average Donation = $3,276 Individual

Eligible Contributions Must be valued at minimum of $250: Cash Donations Photocopy of Check or credit card receipt Stocks and Bonds Stock Transfer Form + Confirmation of Transfer Personal Property Items Two appraisals if over $1,000 Real Estate Donations Two appraisals + Used by Project Payroll Deductions Project Materials or Labor Invoice on OFFICIAL letterhead

Contribution Notes S-Corp: Shareholders of an S-Corp are eligible to apply credits to their individual tax return equal to their equity share in the business. They must provide each shareholder’s SSN as well as their respective share percentages of the S-Corp. Stocks & Bonds: Price is determined at the day of transfer Cash: Submit an invoice/receipt with the paperwork for any donations made with cash.

Process Taxpayer donates to CSP Project CSP Project Director enters required information and documents into online Revenue system Commerce approves tax credit via online Revenue system Revenue system generates record for Commerce and CSP Organization. Revenue system generates Certificate Letter for taxpayer CSP Organization sends Certificate Letter to taxpayer Taxpayer files K-60 to claim credit

CSP Online Entry Go to Click on Customer Service Center-Register Now-or…Still accurate. Click on the box in the top right of the home page. Fill in all fields, be sure sure to check the box for Tax Credits at the bottom of page for primary use of site.

Personal Account Registration

Home Page of Customer Service Center

Organizational Login

Main Menu

New Application

New Application Cont’d

Document Upload

It is required to attach the Tax Credit Application for Contributions form AND A copy of payment

Meanwhile, in the Bureaucracy Cave… State use only Required

Approved Application

Shareholder Information (To edit, just go into the account and select the edit option. Not a separate item now.)

Income Tax Filing The Department of Revenue is the contact for tax issues Procedure to claim the tax credit – Tax Credit Certificate Letter – K-60 (Must file the appropriate form with Revenue)

Funding Gaps Variable rate on Credits (credits are worth up to 50% or 70%) Alternative funding sources (USDA, CDBG, etc)

Reporting and Auditing Quarterly Progress Reports (6) October 20 th, January 20 th, April 20 th, & July 20 th. Final Report (Due June 30 th, 2018) Audit Report “Agreed Upon Procedures” (Required for projects with Tax Credits greater than $100,000. Due January 1, 2019.)

Project Assurances: Pg. 24 & 25 A. Award Period B. Accounting C. Audit Requirements (Agreed Upon Procedures) D. Contributions must be related to project E. Budget Revisions – Alert Commerce – Scope revisions require Commerce approval G. Soliciting Contributions

Le Ann Thurman Community and Economic Development Representative Kansas Department of Commerce 1000 S.W. Jackson Street, Suite 100 Topeka, Kansas Phone: (785) Fax: (785)