High Performance Incentive Program

To be eligible, a firm must either pay above-average wages for their industry, or else 1 1/2 times the statewide average wage exclusive of owner compensation. To determine whether a company pays above-average wages for businesses located within the metropolitan County of Shawnee, the firm's wages will be compared to those of businesses in like industries within that county. Once the wage criterion has been met, the business must either invest an amount equal to two percent of its total payroll on employee training or participate in either the Kansas Industrial Training (KIT) program, the Kansas Industrial Retraining (KIR) program, or the State of Kansas Investment in Lifelong Learning (SKILL) program. Firms must be certified by the Kansas Department of Commerce & Housing before filing for this credit. Participating businesses must be in major standard industrial classification (SIC) categories of 20-51 or 60-89. If a business is in major SIC categories 40-51 or 60-89, more than half of sales must be to Kansas manufacturers and/ or out-of-state commercial or government customers. HPIP also provides that a business establishment may be assigned a standard industrial classification code according to the primary business activity at a single physical location in the state. Specific incentives extended to firms meeting the qualifications include:

• A sales tax exemption on purchases relating to new investment in facility or equipment (without being tied to job creation as with Enterprise Zone sales tax exemption).
• A ten percent investment tax credit against corporate income tax on qualified business facility investment, as defined by KSA 79-32,154, exceeding $50,000. The investment tax credit is a one-time credit with a ten-year carry-over provision, subject to re-qualification, for any unused credits, up to 100 percent of a firm's annual tax liability.
• A workforce training tax credit of up to $50,000 per annum on training expenditures above two percent of total company payroll.
• Priority consideration for other state business assistance programs.
• Eligible purchases covered by the sales tax exemption and capital outlays that qualify for the Investment Tax Credit, are identical to those set forth under the E-Zone program without being tied to a job creation requirement.
• The new credits are available to firms, regardless of their location throughout the state, and participation is voluntary. They do not detract from the state's existing set of incentives or other assistance available to companies under current law. However, a company may not simultaneously claim the investment credit that is tied to new job creation and the ten percent investment credit available to high-performance establishments.

In order to take advantage of HPIP tax credits, the firm must submit a Capital Investment Project Description form HPIP6k, estimating the scope of anticipated investment. This must be done before the company commits to any investment on which the company expects to claim an HPIP tax credit.