CHAPTER 130 HOUSE BILL No. 2055* An Act relating to income taxation; authorizing research and development credits. Be it enacted by the Legislature of the State of Kansas:

      Section  1. (a) For all taxable years commencing after December 31,
2000, a credit shall be allowed against the tax imposed by the Kansas
income tax act on the Kansas taxable income of a taxpayer for expendi-
tures in research and development activities conducted within this state
in an amount equal to 61/2% of the amount by which the amount expended
for such activities in the taxable year of the taxpayer exceeds the taxpayer's
average of the actual expenditures for such purposes made in such taxable
year and the next preceding two taxable years.

      (b) In any one taxable year, the amount of such credit allowable for
deduction from the taxpayer's tax liability shall not exceed 25% of the
total amount of such credit plus any applicable carry forward amount.
The amount by which that portion of the credit allowed by subsections
(a) and (b) to be claimed in any one taxable year exceeds the taxpayer's
tax liability in such year may be carried forward until the total amount of
the credit is used.

      (c) As used in this section, the term ``expenditures in research and
development activities'' means expenditures made for such purposes,
other than expenditures of moneys made available to the taxpayer pur-
suant to federal or state law, which are treated as expenses allowable for
deduction under the provisions of the federal internal revenue code of
1986, and amendments thereto.

  Sec.  2. This act shall take effect and be in force from and after its
publication in the statute book.

Approved April 19, 2001.
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