Instructions For Form K-130/130as (Page 4 of 4) in pdf

HIGH PERFORMANCE INCENTIVE PROGRAM CREDIT

specific commercial and industrial machinery and equipment. The

(Schedule K-59): A credit shall be allowed for the cash investment

property tax must be timely paid during the tax year for which the

in the training and education of the firm’s employees that exceeds

credit is taken. Any amount of the 15% credit exceeding the tax

2% of the firm’s total payroll costs.

liability will be refunded. The machinery and equipment must be

classified for property taxation under section 1 of article 11 of the

BUSINESS EQUIPMENT PROPERTY TAX CREDIT (Schedule

Kansas constitution in subclass (2), (5) or (6) of class 2.

K-64): A credit equal to 15% of the property tax levied and paid on

SPECIFIC INSTRUCTIONS FOR FORM K-130AS

You must complete and attach Parts IV, V, and VI, of Form

the case of a loan which is assigned by the taxpayer to a place

K-130AS to your Kansas return if the financial institution is doing

without this state which is not a regular place of business, it shall be

business within and without Kansas and utilizing the apportionment

presumed, subject to rebuttal by the taxpayer on a showing supported

formula to determine Kansas income.

by a preponderance of the evidence, that substantive contacts

regarding the loan occurred within this state if, at the time the loan

PART IV—Apportionment Formula

was made the taxpayers commercial domicile was within this state.

Part IV is to be used by corporations with income derived from

Credit card receivables are valued at their outstanding principle

sources both within and without Kansas for the purpose of allocating

balance, without regard to any reserve for bad debts. If a credit

and apportioning income.

card receivable is charged off in whole or in part for federal income

All business income shall be apportioned to this state by

tax purposes, the portion of the receivable charged off is not

multiplying the business income by a fraction, the numerator of

outstanding. In determining the location of credit card receivables,

which is the property factor plus the payroll factor plus the receipts

credit card receivables are treated as loans and shall be subject to

factor, and the denominator of which is three.

the same rules, as shown above.

LINE A—PROPERTY FACTOR: The property factor shall include all

LINE B—PAYROLL FACTOR: The payroll factor shall include the

real and tangible personal property owned or rented and used during

total amount paid by the taxpayer for compensation during the tax

the income year and the average value of the taxpayer’s loan and

period. The total amount “paid” to the employees is determined upon

credit card receivables. Property used in connection with the production

the basis of the taxpayer’s accounting method. If the taxpayer has

of nonbusiness income shall be excluded from the factor. Property

adopted the accrual method of accounting, all compensation properly

shall be included in the property factor if it is actually used or is available

accrued shall be deemed to have been paid. Notwithstanding the

for or capable of being used during the income year for the production

taxpayer’s method of accounting, at the election of the taxpayer,

of business income. Property used in the production of business

compensation paid to employees may be included in the payroll

income shall remain in the property factor until its permanent

factor by use of the cash method if the taxpayer is required to report

withdrawal is established by an identifiable event such as its sale or

such compensation under such method for unemployment

conversion to the production of nonbusiness income.

compensation purposes. The term “compensation” means wages,

The numerator of the property factor shall include the average

salaries, commissions and any other form of remuneration paid to

value of the taxpayer’s real and tangible personal property owned

employees for personal services. Payments made to an independent

and located or used in this state during the income year plus the

contractor or any other person not properly classifiable as an

value of rented real and tangible personal property so used.

employee are excluded. Only amounts paid directly to employees

Property owned by the taxpayer in transit between locations of the

are included in the payroll factor. The compensation of any employee

taxpayer shall be considered to be at the destination for purposes

on account of activities which are connected with the production of

of the property factor. Property in transit between a buyer and seller

nonbusiness income shall be excluded from the factor. The

which is included by a taxpayer in the denominator of its property

denominator of the payroll factor is the total compensation paid

factor in accordance with its regular accounting practices shall be

everywhere during the income year.

included in the numerator according to the state of destination.

The numerator of the payroll factor is the total amount paid in

Transportation property is included in the numerator to the extent

this State during the income year by the taxpayer for compensation.

the property is used in this state. If the extent of the use of any

Compensation is paid in this State if any one of the following tests,

transportation property within this state cannot be determined, then

applied consecutively, are met: (a) The employee’s service is

the property will be deemed to be used wholly in the state in which

performed entirely within this State; (b) The employee’s service is

the property has its principle base of operations. A motor vehicle

performed both within and without this State, but the service

will be deemed to be used wholly in the state in which it is registered.

performed without this State is “incidental” to the employee’s service

Property owned by the taxpayer shall be valued at its original

within this state (the word incidental means any service which is

cost or other basis of such property for federal income tax purposes

temporary or transitory in nature, or which is rendered in connection

without regard to depletion, depreciation or amortization. Property

with an isolated transaction); (c) If the employee’s services are

rented by the taxpayer is valued at eight times the gross annual

performed both within and without this State, the employee’s

rental rate. As a general rule the average value of property owned

compensation will be attributed to this State: (i) if the employee’s

by the taxpayer shall be determined by averaging the values at the

principle base of operations is in this State; or (ii) if there is no

beginning and ending of the income year. However, the Director of

base of operations in any state in which some part of the service is

Taxation may require or allow averaging by monthly values if such

performed, but the place from which the service is directed or

method of averaging is required to properly reflect the average

controlled is in the State; or (iii) if the base of operations and the

value of the taxpayer’s property for the income year.

place from which the service is directed or controlled is not in any

Loans are valued at their outstanding principle balance, without

state in which some part of the service is performed, but the

regard to any reserve for bad debts. If a loan is charged off in whole

employee’s residence is in this State. The term “base of operation”

or in part for federal income tax purposes, the portion of the loan

is the place from which the employee starts his work and to which

charged off is not outstanding. Loans are considered to be located

he customarily returns in order to receive instructions from the

within this state if it is properly assigned to a regular place of business

taxpayer or communications from his customers or other persons,

of the taxpayer within this state at the time the loan was made; or, in

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Instructions For Form K-130/130as Page 4

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