Purchases from Qualified Vendor Credit
Income Taxpayer-Effective for tax years 2019 through 2023.
An income tax credit shall be allowed for goods and services purchased from a qualified vendor.
Must be a certified business by the Department of Administration.
The taxpayer must complete an application with the Kansas Department of Commerce and receive approval from Commerce.
The taxpayer must make purchases from a qualified vendor.
All purchases shall be certified annually by the Kansas Department of Commerce.
The qualified vendor/certified business must pay minimum wage.
Information about certified business, contact the Kansas Department of Administration
The credit is equal to 15% of the amount for approved expenditures of goods and services purchased and shall be deducted from the taxpayer’s income tax liability for the tax year in which the expenditures were made by the taxpayer.
Limitation of Credit
The amount of credit awarded for each taxpayer shall not exceed $500,000 per qualified vendor per tax year.
In no event shall the total amount of cumulative credits allowed under this section exceed $5,000,000 for all tax years that the credit remains in effect.
If the credit exceeds the amount of the tax liability, the excess amount may be carried over to the next succeeding tax year or years until the total amount of the tax credit has been deducted from the tax liability, except that no tax credit shall be carried over for deduction after the fourth tax year succeeding the tax year in which the expenditures were incurred.
Procedures to Claim the Credit
You may download Schedule K-44 to claim the Purchases from Qualified Vendor tax credit.
Purchases from Qualified Vendor Credit Definitions
Qualified vendor means an entity that:
- Is a "qualified vendor" pursuant to K.S.A. 75-3317, and amendments thereto, or is a "certified business" that is also a nonprofit organization pursuant to K.S.A. 75-3740, and amendments thereto;
- pays minimum wage or above to all their employees in a manner that meets the definition of "competitive employment" pursuant to K.S.A. 44-1136, and amendments thereto;
- meets the definition of employing all of their workers in an "integrated setting" pursuant to K.S.A. 44-1136, and amendments thereto; and
- offers a qualified company-sponsored insurance plan under the affordable care act or pays the required subsidy to the internal revenue service for employees who purchase insurance through the open market, if a company-sponsored plan is not offered. If any such company is not covered under the affordable care act, and does not offer a company-sponsored insurance plan, such company must offer assistance to the employee to cover at least 75% of their health insurance costs through a health savings account or other legal and appropriate methodology.
Certified business means any business certified by the department of administration that is a sole proprietorship, partnership, association or corporation domiciled in Kansas, or any corporation, even if a wholly owned subsidiary of a foreign corporation, that:
- Does business primarily in Kansas or substantially all of its production in Kansas;
- employs at least 30% of its employees who are individuals with disabilities and reside in Kansas;
- offers to contribute at least 75% of the premium cost for individual health insurance coverage for each employee. The department of administration shall require a certification of these facts; and
- does not employ individuals under a certificate issued by the United States secretary of labor under 29 U.S.C. § 214(c);
Individuals with disabilities or individual with a disability means any individual who:
- Is certified by the Kansas department for aging and disability services or by the Kansas department for children and families, which administers the rehabilitation services program as having a physical or mental impairment that constitutes a substantial barrier to employment;
- works a minimum number of hours per week for a certified business necessary to qualify for health insurance coverage offered pursuant to subsection (d)(1); and
- (i) is receiving services, has received services or is eligible to receive services under a home and community based services program, as defined by K.S.A. 39-7,100, and amendments thereto; (ii) is employed by a charitable organization domiciled in the state of Kansas and exempt from federal income taxation pursuant to section 501(c)(3) of the federal internal revenue code of 1986, as amended; or (iii) is an individual with a disability pursuant to the disability standards established by the social security administration as determined by the Kansas disability determination services under the Kansas department for children and families.