Income tax help with a twist: Move to rural Kansas. No state income tax.

Income tax help in Kansas comes in the form of a five-year amnesty on state income taxes. State hopes new income tax help will lure people to rural areas.

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Andy Nelson / The Christian Science Monitor / File
Lebanon, Kan., is in Smith County, one of 50 counties that has lost substantial population in the past decade. The state is offering income tax help – in the form of a five-year amnesty on state income taxes – to people who move to rural counties with shrinking populations.

Even before it was signed into law, Carolyn Dunn saw the potential of a program to lure new families to rural Kansas on the promise of no income taxes for five years.

The program created Rural Opportunity Zones in areas that have seen population declines over the past decade. Stafford County, where Dunn is executive director of the economic development agency, fits that bill. The county lost nearly 10 percent of its residents between 2000 and 2010.

"We're trying to establish more contact with the alumni from this area. We think they might be the logical fit for the lifestyle," said Dunn, who works for the agency in St. John.

Republican Gov. Sam Brownback signed the bill into law on March 31 and has planned a ceremonial statewide tour on Monday to mark the new law with stops in Belleville, Yates Center, Colby and Wichita.

Fifty of the 105 Kansas counties are eligible to participate in the program. Nearly all have seen double-digit population declines over the past decade, a continuation of the urbanization of Kansas that has occurred for the last century.

To qualify for this unusual income tax help, residents must move from out of state to one of the counties and have not lived in Kansas for the past five years. They will receive an income tax abatement for the next five years with no strings attached. There is no penalty or payback provision should they leave that county before the five years expire.

In addition, college graduates who move to one of these counties could receive up to $3,000 per year to repay student loans. The program is capped at $1.5 million in state money, with an equal match required from participating counties.

"They really see it as an opportunity to reverse the migration from their counties and to start growing them again, especially those counties situated along the state line," said spokeswoman Sherriene Jones-Sontag.

The law is the first piece of Brownback's economic policies that he announced during the 2010 campaign for governor and introduced in January when taking office. Jones-Sontag said another key part would remove limitations on business investment expenses, allowing smaller firms to take advantage of tax credits for putting money in their operations.

SEE ALSO: Recession over? Not in these four cities.

Versions of the expensing bill have passed both legislative chambers and final version will be negotiated when lawmakers return April 27 from a three-week recess.

Dunn said she's been visiting with a family in Nebraska that is interested in moving back to the area if employment became available.

"They want to make the move here when the right opportunity presents itself," Dunn said. "It's just one more thing that's going to make it feasible for them to come home."

Jones-Sontag said the state would be marketing the program through a variety of efforts to get the word out nationwide. No goals have been set for population increases, but the administration is confident.

"If we can get one person to move to a rural county and become a member of that community, I think we have succeeded," she said. "One positive experience can have an incredible ripple effect."

St. John is west of Hutchinson and Dunn hopes the tax law can be used to lure new families moving to the region to work for one of the new wind energy firms getting started in Reno County.

"Not that we want to steal their thunder, but if we could find 10 families that would be interested in moving across the county line it would be a really big deal," Dunn said.

There are three school districts in Stafford County, she said, all with about 300 students each. However, declining enrollments and the pending loss of state education funding creates difficulties to keep the schools functioning. In most cases, the schools are the largest employer in a rural city or county.

"It would be a big deal to stabilize that or even turn that around a little bit," Dunn said.

SEE ALSO: Recession over? Not in these four cities.

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