COVID-19 Retail Storefront Property Tax Relief Act Overview

Kansas’ COVID-19 Retail Storefront Property Tax Relief Act takes effect on July 1, 2022, and has the potential to significantly impact retailers. The legislation allows for partial property tax refunds for tax years 2020 and 2021 for certain retailers. Those which qualify were shut down operationally or restricted at their storefront by a COVID-19 action or order put in place by the state, local government or local health department or health officer.

Kansas Retail Storefront Eligibility

To be eligible, the retailer must be a retail storefront with real property where retail sales are conducted with customers based on their on-site physical presence and can be part of a multi-purpose or multi-retail building.

Additionally, these businesses must:

  • Be a for profit business.
  • Have no delinquent property tax outstanding prior to 2020.
  • Be in operation as of July 1, 2019, and March 1, 2020.
  • File a 2019 return showing annual revenues at a minimum of $10,000 for 2019 and falling gross sales in 2020 or 2021 when compared to 2019.
  • Must not have exceeded $150,000 in other COVID-19 state, local or federal funding, in any combination.

This legislation specifically excludes grocery stores, pharmacies, hardware stores or home improvement businesses, retail liquor stores, manufacturers and food processors, pre-kindergarten schools through postsecondary, hospitals and health care providers (not including dentists), property management and real estate services, professional services, agricultural and aquaculture producers, hosts/operators of vacation/short term rentals, passive businesses, financial businesses engaged in lending, cable companies, telephone companies, utilities, and energy production, generation and distribution companies.

Key Definitions Impact the Refund

The COVID-19 ordered shutdown days gross rebate amount is the property tax accrued or 15% of rent paid in cash for the tax year. Depending on the number of ordered restricted operation days, this figure is then:

  • divided by 3 for retailers shut down for 91+ days,
  • divided by 4 for retailers shut down 61-90 days,
  • divided by 6 for retailers shut down 31-60 days, or
  • divided by 12 for businesses shut down 1-30 days.

What Refund Amount is Available?

Your refund amount will be the overall sum of the COVID-19 ordered shutdown days gross rebate amount plus the COVID-19 ordered restricted operations days gross rebate amount. The sum is then multiplied by 33% to reach the maximum potential refund. The refund may not however surpass $5,000 per tax year per retail storefront.

How to Claim Your Refund

The process is still being developed. In the short term, the state’s director of taxation is tasked with developing a form to claim the refund. When the form becomes available, make sure to file your refund claim by April 15, 2023, at the latest. As part of the claim, you will have to show reasonable proof of eligibility, property taxes and rent paid. Any refund will be applied to 2020 and 2021 outstanding property tax before receiving payment for the remainder.

Since this legislation recently passed, stay tuned for additional guidance. In the meantime, feel free to contact your Adams Brown advisor with any questions or to learn more.