For Immediate Release: May 10, 2006

Media Contact: Ryan Entz, 268-1152, rentz@wichitachamber.org

Machinery and equipment tax exemption bill passes, Governor expected

to sign

This bill represents one of the states most significant legislations to promote economic growth

and job creation.

The Kansas Legislature today passed the most significant legislation to promote economic growth and job creation in decades. House Bill 2583 eliminates the property tax on business machinery and equipment acquired after July 1, 2006. Governor Sebelius is expected to sign the bill.

The Wichita Metro Chamber of Commerce says that the exemption is particularly important to south central Kansas businesses where machinery and equipment for manufacturing are so important to the economy.

“The repeal of the machinery and equipment tax provides our Greater Wichita Economic Development Coalition staff with another critical tool in their tool box for helping existing business expand in Kansas and attracting new businesses to our state,” shared Bryan Derreberry, president & CEO for the Chamber, applauding the actions of the Kansas legislature. “Passage of this bill provides a dual win – it creates a more attractive business environment from a tax standpoint and it makes it more affordable for businesses to purchase the machinery and equipment needed to enhance worker productivity.”

Passage of the bill is expected to help business recruitment and retention efforts in this community as economic development professionals have noted that Kansas’ business personal property taxes have been a deterrent for the expansion and attraction of new jobs.

“The Chamber’s efforts on this bill illustrate the significant role they have in improving the product that we offer businesses,” says Patrick French, president of the Greater Wichita Economic Development Coalition. “This provides another powerful incentive we can use as we compete for each prospect.”

Bernie Koch, vice president of government relations for the Chamber, has lobbied the legislature for many years concerning the benefits of encouraging equipment investment. Koch testified to the House and Senate Tax Committees throughout this year’s legislative session saying, “there is a clear, strong and robust relationship between national rates of machinery and equipment investment and productivity growth.”

To protect local governments from loss of tax base, the bill includes four years of state aid to those governments where the tax base declines from loss of machinery and equipment tax. Built in to this bill is also the Local Ad Valorem Tax Relief Fund that will restart state aid in 2010, aid that was discontinued by legislators in 2002.

The bill also increases the current property tax exemption for business personal property to $1,500 from the current $400.