Economic Development Exemptions (EDX) are used to encourage manufacturing, research and development and warehousing/distribution companies to grow in Wichita. Taxes on improvements to land and buildings can be exempted for up to 10 years. All new business machinery and equipment are permanently exempt under state law. The percentage of taxes abated is based on job creation and capital investment.
For profit companies may be considered for EDXs if they are investing capital to develop new facilities, adding machinery and equipment and creating new jobs.
To qualify, companies must generate the majority of their revenue from outside of Sedgwick County and wages for the new jobs must meet certain standards.
Property Tax Abatement. Companies investing to expand their facilities and employees may qualify for a potential tax abatement. The percentage of tax abatement is based on a variety of criteria and may be for a period of up to ten years, with a compliance review at the five-year mark. Please see the Economic Development Guidelines for further details.
Businesses must generally be involved in one of 11 business activities, identified in the Economic Development Guidelines. Projects that provide additional community or workforce development benefits may be considered for additional incentives or a reduced threshold to qualify for incentives.
Property tax abatement is calculated based on many factors. The recommended percentage of property tax abatement is a cumulative amount based on job creation, capital investment and additional considerations. Below is the base table for calculating an exemption, as well as additional considerations that provide an additional abatement up to 100%.
Abatement Percentage Calculation
|New Capital Investment
- Regional Growth Plan sector 10%
- Utilizing State, federal or utility incentives 10%
- Sustainable Development/Alternative Energy use 15%
- Investing in, or funding, entrepreneurship 25%
- Talent attraction plan (must be documented) 25%
- Locating in Redevelopment Area 25%
- Community and Workforce Development Benefits 25%
Example: If a company is projecting it would create 10 new jobs, it would qualify for a 30% abatement. If it is also investing $4,000,000 in facilities and/or machinery and equipment, it would qualify for an additional 40%, totaling 70%. If the company is in a Regional Growth Plan sector, add another 10% (now 80% total). If the company is also utilizing State of Kansas incentives, add another 10% for a total of a 90% abatement.