Kansas Incentives and Laws

Last Updated May 2006

State Incentives

Biodiesel Fuel Use Incentive

A biodiesel fuel production incentive is available in the amount of $.30 per gallon of biodiesel fuel sold by a qualified Kansas biodiesel fuel producer. The incentive is payable to producers from the Kansas Qualified Biodiesel Fuel Producer Incentive Fund. Funding will be made available for the production of biodiesel fuel through July 1, 2016. (Reference Senate Bill 388, 2006).

Alternative Fuel Vehicle (AFV) Tax Credit

The state offers an income tax credit equal to 40% of the incremental or conversion cost for qualified AFVs placed in service after January 1, 2005, as outlined in the chart below. Qualified AFVs include vehicles that operate on compressed natural gas (CNG), a blend of 85% ethanol and 15% gasoline (E85), liquefied petroleum gas (LPG), and electric vehicles.

Alternatively, a tax credit in an amount not to exceed the lesser of $750 or 5% of the cost of the AFV is available to a taxpayer who purchases an original equipment manufacturer (OEM) AFV. This credit is allowed only to the first individual to take title of the vehicle. For motor vehicles capable of operating on E85, this credit is allowed for taxable years after December 31, 1999. The individual claiming the credit must provide evidence of purchasing at least 500 gallons of E85 between the time the vehicle was purchased and December 31 of the next calendar year. This tax credit should be deducted from the taxpayer's income tax liability for the taxable year in which the expenditures are made. In the event the credit is more than the taxpayer's tax liability for that year, the remaining credit may be carried over for up to three years after the year in which the expenditures were made. (Reference Kansas Statutes 79-32,201)

Point of Contact

Jim Ploger
Director
Kansas Energy Office
Phone (785) 271-3349
Fax (785) 271-3268
j.ploger@kcc.state.ks.us
http://www.kcc.state.ks.us/energy/alt_fuels.htm
 

Alternative Fuel Refueling Infrastructure Tax Credit

The state offers an income tax credit for refueling stations placed in service after January 1, 2005; the tax credit may not exceed $160,000. This tax credit should be deducted from the taxpayer's income tax liability for the taxable year in which the expenditures are made. In the event the credit is more than the taxpayer's tax liability for that year, the remaining credit may be carried over for up to three years after the year in which the expenditures were made. (Reference Kansas Statutes 79-32,201)

Point of Contact

Jim Ploger
Director
Kansas Energy Office
Phone (785) 271-3349
Fax (785) 271-3268
j.ploger@kcc.state.ks.us
http://www.kcc.state.ks.us/energy/alt_fuels.htm
 

Ethanol Production Incentive

The Kansas Qualified Agricultural Ethyl Alcohol Producer Fund enables qualified agricultural ethyl alcohol producers to apply to the Department of Revenue for a production incentive. Ethyl alcohol producers who began production before July 1, 2001 are eligible to receive $0.05 for each gallon sold to an alcohol blender during 2002, 2003, and 2004. If the producer who is in production prior to July 1, 2001, increases production capacity by an amount of 5,000,000 gallons over the producer's base sales, $0.075 may be collected for each gallon sold to an alcohol blender that is in excess of the producer's base sales (up to 15,000,000 gallons). Producers who start production on or after July 1, 2001 and who have sold at least 5,000,000 gallons to an alcohol blender may receive $0.075 for each gallon sold (up to 15,000,000 gallons). (Reference Kansas Statutes 79-34,163)

Point of Contact

Patricia Platt
Public Service Administrator II
Kansas Department of Revenue
Phone (785) 291-3670
Fax (785) 296-2703
patricia_platt@kdor.state.ks.us
 

State Laws and Regulations

Ethanol Tax Reduction

Effective January 1, 2007, the motor vehicle fuel tax rate on E85 fuel will be a minimum of $.17 per gallon until July 1, 2020. On and after July 1, 2020, the tax on E85 fuel would be a minimum of $.11 per gallon. In addition, the bill defines E85 as an alternative fuel that is a blend of denatured ethanol and hydrocarbon that typically contains 85 percent ethanol by volume, but at least 70 percent ethanol by volume and complies with ASTM specification D5798-99. This bill also includes the tax paid on motor fuel or special fuels by out-of-state importers and requires these taxes to be paid by such individuals. (Reference Senate Bill 544, 2006).

Biofuels Use

A 2% or higher blend of biodiesel must be purchased for use in state-owned diesel powered vehicles and equipment, where available, as long as the incremental price of biodiesel is not more than $0.10 per gallon as compared to the price of diesel fuel. Further, individuals operating state-owned motor vehicles must purchase fuel blends containing at least 10% ethanol, as long as the fuel blends containing at least 10% ethanol are not $0.10 per gallon more than the current price per gallon of regular fuel. (Reference Kansas Statutes 75-3744a)

Alternative Fuels Tax

Any individual using or selling compressed natural gas (CNG), liquefied natural gas (LNG), or liquefied petroleum gas (LPG) as a motor fuel is required to report fuel use annually to the Kansas Department of Revenue. Beginning July 1, 2003, the tax imposed should not be less than $0.23 per gallon, compared to the conventional motor fuel tax rate of $0.24 per gallon. (Reference Kansas Statutes 79-34,141; 79-3490; and 79-3491a - 79-3492e)

Low-Speed Vehicle Access to Roadways

A low-speed vehicle is defined as any four-wheeled electric vehicle whose top speed is greater than 20 miles per hour (mph) but not greater than 25 mph and is manufactured in compliance with the national highway and traffic safety administration standards for low-speed vehicles in the Code of Federal Regulations Title 49, Part 571.500. Low-speed vehicles may only travel on roads with a posted speed limit of 40 miles per hour or less and must be appropriately licensed. (Reference Kansas Statutes 8-15,101; 8-1488; 8-1701; and 8-2118)

Alternative Fuel Vehicle (AFV) Acquisition Requirements

In model year 2000 and thereafter, 75% of new light-duty (less than or equal to 8,500 lbs. GVWR) motor vehicles acquired by the state fleet and its agencies, which are used primarily within a metropolitan statistical area or a consolidated metropolitan statistical area, are required to be AFVs. (Reference Kansas Statutes 75-4616)

Utilities/Private Incentives

There are currently no known utility or private incentives offered in Kansas

Kansas Points of Contact: