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State Tax Credit for Rehabilitation of Historic Buildings in Kansas

On April 16, 2001, Governor Bill Graves signed into law House Bill 2128, thereby creating a state rehabilitation tax credit for Kansas. The program provides for a state income, privilege, or premiums tax credit equal to 25% of qualified expenses on qualified historic structures used for either income-producing or non-income-producing purposes. The Kansas State Historic Preservation Office administers the program.

    Requirements for the State Tax Credit
  1. Determine whether your project meets the requirements for the federal rehabilitation tax credit program. Projects approved for the federal rehabilitation tax credit program (for income-producing properties) will be automatically approved for the state rehabilitation tax credit program. Projects on non-income-producing buildings, not eligible for the federal program, must be approved before beginning work.
  2. Properties eligible for the state credit, but not the federal, must be listed on the state or national register before beginning work. If the property is located within a historic district, it must be certified as contributing to the district.
  3. Project work cost must exceed $5,000.
  4. Project work must conform to the Secretary of the Interior's Standards for Rehabilitation. Conforming to the standards assists in the long-term preservation of a property's significance through the preservation of historic materials and features.
  5. Applicants must provide detailed photographs of the building as part of the application process. Please include detailed photos showing areas where work will take place as well as good, clear images of the general exterior appearance.
  6. Applicants must apply to the State Historic Preservation Office (SHPO) before work begins. In order to receive the tax credit, the applicant must complete three parts of an application form. The process is summarized below.

Application Process

The application for the state tax credit is a three-part process. Parts one and two of the application may be submitted to the SHPO together. Part three is submitted after the rehabilitation work is complete.

Part One
Qualified Historic Structure Certification - This form will only need to be completed if the property is within a recognized historic district. This part will be reviewed to certify that the property is a contributing structure within the district. Contributing structures are those that contribute to the significance and character of the district. The application must accompany at least one photo of the front of the building.
Part Two
Qualified Rehabilitation Certification - This form is required for all applicants to certify that the project meets the Secretary of the Interior's Standards for Rehabilitation. In Part Two the applicant will outline the building's condition and all proposed work. The applicant must submit photographs of the building showing all areas of proposed changes. Photographic documentation of areas to be rehabilitated provides valuable information in the review process. The SHPO reviews all plans submitted in Part Two and certifies that they comply with the Secretary of the Interior's Standards for Rehabilitation. The SHPO will advise applicants and provide technical assistance when needed. Work may begin on the project only after approval by the SHPO.
Part Three
Rehabilitation Completion Certification - Part Three is submitted when all work is complete. Upon review and approval of Part Three, applicants may claim 25% of the approved expenses toward their state income, privilege, or premiums taxes.

Application Processing Fee

The law requires that the SHPO receive an application-processing fee for all projects (K.A.R. 118-5-10). The fee is based on the dollar amount of the qualified rehabilitation expenditures and is not due until requested. These fees are listed below:

Fee Qualified Rehab. Expenditures
$100 $5,000 - $25,000
$200 $25,001 - $50,000
$350 $50,001 - $100,000
$500 $100,001 - $500,000
$750 $500,001 - $1,000,000
$1,000 over $1,000,000

Qualified Expenditures

The following are examples of qualified and unqualified expenses. This list is not comprehensive. Contact SHPO for further information.


Claiming the tax credit

When the planned work is complete and Part Three of the application is approved, owners may claim the tax credit on Form K-35. The form is available from the Kansas Department of Revenue. If the amount of the credit exceeds the taxpayer's income, privilege, or premiums tax liability for the year in which the rehabilitation costs were incurred, the excess amount may be carried forward for up to ten years. New provisions also allow the state tax credits to be transferred to other taxpayers. Please contact the SHPO for more details.

Other tax incentives

Federal Rehabilitation Tax Credit - This program is administered by the National Park Service (NPS), the Internal Revenue Service, and the State Historic Preservation Office {SHPO). This 20% income tax credit is available for depreciable resources rehabilitated for commercial, industrial, agriculutral, or rental residential uses. It is not available for rehabilitating residential properties. Properties must be listed in the National register of Historic Places individually or within a registered historic district. Please contact the SHPO for further information.


For further information contact:
Tax Incentive Program
Cultural Resources Division
Kansas State Historical Society
6425 S. W. Sixth Avenue
Topeka, KS 66615-1099

785-272-8681, ext. 240
cultural_resources@kshs.org


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