A credit may be deducted from a taxpayerÆs income or privilege tax liability if the taxpayer invests in stock issued by Kansas Venture Capital, Inc. The taxpayer may also modify from federal taxable income any dividend income on stock issued by Kansas Venture Capital, Inc.
A credit may also be deducted from a taxpayerÆs income tax liability if the taxpayer invests in a certified local seed capital pool if that investment was made after December 31, 1986. Local seed capital pool means money invested in a fund established to provide funding for use by Kansas small businesses for any one of the following purposes:
(1) Development of a prototype product or process; (2) a marketing study to determine the feasibility of a new product or process; or (3) a business plan for the development and production of a new product or process. These local seed capital pools may be certified by the Secretary of Commerce by meeting certain criteria.
A credit may also be deducted from a taxpayerÆs income tax liability if the taxpayer invests in a certified Kansas venture capital company and if the investment was made after December 31, 1985 and prior to January 1, 1998. No modification is allowed for dividends received from this investment. Kansas venture capital company means any for-profit partnership or corporation that has as its primary business activity the investments of funds in return for equity in ventures that are in need of capital for expansion, new product development or similar business purposes and that may be certified by the Secretary of Commerce by meeting certain criteria. An original investor in a certified Kansas venture capital company that is not subject to the Kansas income tax may transfer their interest in such credit to a Kansas taxpayer. A Kansas taxpayer acquiring a credit by transfer is subject to the same limitations as any other taxpayer. Only the full credit for any one investment may be transferred and such credit may only be transferred one time.
Finally, Kansas law allows a credit to taxpayers who make cash investments prior to January 1, 2000, in the technology-based venture capital company (Sunflower Technology Venture, LP) authorized by K.S.A. 74-8316.
The amount of credit for any of these types of investments is 25% of the total amount of cash investment in such stock. The amount of credit, which exceeds the taxpayerÆs tax liability in any one taxable year, may be carried forward until the total amount of credit is used.