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State Historic Rehabilitation Tax Credit

Downtown Council Grove

Overview

The Kansas Historic Rehabilitation Tax Credit was created in 2001. Since that time the program has generated over $1 billion dollars of investment in historic buildings throughout Kansas. The state historic tax credit program provides a state income tax credit equal to a percentage of the property owner's qualified rehabilitation costs.

As of July 1, 2022, the percentage awarded is based upon the population of the city or township where the property is located. The table below describes the current credit percentage breakdown.

Already familiar and ready to start the applications? Click HERE

 

Requirements to participate in the Kansas Historic Rehabilitation Tax Credit program

Work must be done to a Register-listed building

  • The property must be listed on the State or National Register before an application for credits is submitted. Check to see if your property is register-listed by searching HERE
  • The work must be done to a building. Work done on the surrounding site, landscaping, outside the footprint of a building, or on a structure that is not a building (i.e. bridge, monument, water tower) is not eligible for the credit.

The qualified expenses must be paid by the building owner and must total to $5,000 or more.

  • Only building owners or long-term leasees are may receive the credits.
  • Insurance proceeds, grant money, and any other money not charged to a capital account, may not be counted towards the qualified project total. 
  • Multiple work items may be combined to reach the $5,000 minimum requirement. See examples of qualifying and non-qualifying expenditures.

Application must be submitted and approved BEFORE physical work begins

  • All work must meet the Secretary of the Interior's Standards for Rehabilitation. 
  • The project must be reviewed before the work starts to ensure that the work meets the Standards. 
  • If ANY portion of the project work does NOT meet the Standards for Rehabilitation, the entire project will be denied and no credits will be issued. 
  • In case of building or project emergencies, please email the tax credit email for help kshs.taxcredits@ks.gov or call 785-272-8681 ext. 240.

 

How to use the Credits

Credits will be issued based upon the total spent on qualified costs for the project.  The Part 3 application, photographs, and audit forms are submitted to the SHPO office, once a complete application is submitted it will be reviewed.  If the work meets the Secretary of the Interior's Standards for Rehabilitation then the project is approved by the SHPO office.  Upon approval a certificate is then issued to the owner with the credit amount.  These credits can be used by the owner in several different ways

The credits may be used to offset the Kansas Income Taxes of the property owner.

The credits may be carried forward 10 years from the completion date

The credits may be claimed using the K-35 form on their Kansas Taxes

Please contact a tax professional for advice on how to utilize these credits.

The credits may be sold or transferred to any potential buyer! 

The credits are non-refundable and must be used to pay a tax liability.  For non-profit organizations, local governments, and other property owners that do not have a Kansas state income tax liability, these credits may be transferred or sold to other taxpayers. 

Transfer information and submissions may be found here:

Tax Credit Transfers

 

 

Application Process

Click on the link below to open the document as a pdf. Please save application forms to your computer before filling them out.

 

Part 1Qualified Historic Structure Certification (Please save the application form to your computer before filling it out.) - 

This one-page form is required if your building is located in a National Register or State Register Historic District. The form will be reviewed to verify that your building is a contributor to the character of the historic district. Please be sure to provide good photographs of the front elevation of your property. 

 

Part 2Qualified Rehabilitation Certification (Please save the application form to your computer before filling it out.) - 

This form is required for all applicants to certify that the proposed project will meet the Secretary of the Interior's Standards for Rehabilitation. The applicant should outline the building's existing condition and all proposed work on this form. Descriptions of work should include all work items, not just those listed as qualifying costs. Photographs showing all areas of proposed changes are required to accompany this form. If you are proposing major changes or you are using an architect, additional materials, such as drawings, may be required. The SHPO staff will review the application and materials to certify that all proposed work meets the Standards. The SHPO will advise applicants and provide technical assistance when needed. Work may begin on the proposed project only after this application has been approved by the SHPO.

 

Application Processing Fee—An application-processing fee is required for the SHPO to review state tax credit applications. Fees are based on the estimated dollar amount of qualified rehabilitation expenditures. Please submit the appropriate fee as noted below with your Part 2 application or as requested by SHPO staff.  Fees may be paid via the online store; scroll to the bottom of the store's webpage and click "Tax Credits".

Qualified Expenditures     Fee

$5,000 - $25,000               $200

$25,001 - $50,000             $350

$50,001 - $100,000           $500

$100,001 - $500,000         $900

$500,001 - $1,000,000      $1,500

over $1,000,000                $2,000

 

Amendments (Please save the application form to your computer before filling it out.)

Once you have an open project on file with the SHPO, any changes to the proposed scope of work must be submitted for approval to the tax review staff via an amendment form before those changes are implemented.

 

Part 3Rehabilitation Completion Certification (Please save the application form to your computer before filling it out.) -

This form must be submitted when all work has been completed. Photographs of the finished work must accompany the submission. Upon review and approval by the SHPO, applicants will receive a certificate verifying that they may claim a percentage of their qualified expenses as credit toward their Kansas state income, privilege, or premiums taxes. Qualified expenses are generally those associated with the physical structure of the building, but other soft costs can be applied as well.

To verify the project expenses and receive credits, the Kansas Department of Revenue (KDOR) Schedules I and II must be submitted with the part 3 application form. Contact the SHPO or click the following links for instructions and a checklist to help you complete the Schedules.

 

Using the Credits

State Tax Credits can be claimed by the owner of the credits by submitting the K-35 form with their tax return.  The credits may be used on state of Kansas Income, Premium and Privilege Taxes.  The credits are non-refundable and must be used to pay a tax liability.

For non-profit organizations, local governments, and other property owners that do not have a Kansas state income tax liability, these credits may be transferred or sold to other taxpayers.  for Additional information and submission of a transfer please go here. https://www.kshs.org/p/state-tax-credit-transfers/20732

 

Questions?

Please contact the SHPO or Tax Credit Program Administrators if you have questions at 785-272-8681 x240 or kshs.taxcredits@ks.gov