07/15/2011
Traditionally, Kansas and Missouri have each had limited incentives in their tool box when seeking to retain existing jobs. Both states have been able to offer much more meaningful incentives to businesses moving into the state, and this has spurred some movement of businesses within the Kansas City metro area from one side of the state line to the other to obtain significantly enhanced incentives.
In its last session, the Kansas Legislature has expanded one of its principal incentive tools, the Promoting Employment Across Kansas (PEAK) program, to allow PEAK to be used, beginning in 2013, for job retention efforts. The PEAK statute has been amended to allow, during the period from January 1, 2013 through December 31, 2014, the Kansas Secretary of Commerce to offer PEAK benefits to retain jobs in Kansas. For job retention projects approved within this limited window of time, an employer may be able to retain 95% of its Kansas payroll withholding tax for a period of up to 5 years. In making the decision as to whether to offer PEAK benefits in a particular job retention effort, the Secretary of Commerce must determine that the employer has competitive alternatives it is considering and that relocation of the jobs may be imminent. The Secretary is also required to assess other factors (including whether the retention is important to the economic vitality of the state and the importance of the particular industry to the state because of the quantity, quality or wages of the retained jobs). The total benefits that can be given for retained jobs is capped at $1.2 million for FY 2013, $2.4 million for FY 2014, and $1.2 million for FY 2015.
While the benefits that can be offered as a result of this new legislation will generally not equal the benefits that an employer can receive for a relocation of jobs across the state line (just as Missouri’s benefits available for retained jobs will generally not equal the benefits available for a Missouri employer to relocate to Kansas), this new legislation represents an important change in approach by Kansas. Legislation proposed in Missouri to provide Missouri Quality Jobs benefits in retention situations was not approved by the Missouri Senate.
For more information on this alert, contact Dave Frantze at 816.691.3181, Todd LaSala at 816.691.3410 or any of our Real Estate attorneys.
Stinson attorneys Dave Frantze and Todd LaSala will examine the type of incentives outlined above at a “Public Incentives for New Jobs” seminar to be offered on two separate dates, Thursday, Aug. 25 and Wednesday, Sept. 14. Join us for an interesting and informative discussion on the public incentives being offered by the states of Kansas and Missouri to create and retain jobs. Visit the events page of our website to learn more.