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HIGH PERFORMANCE INCENTIVE PROGRAM
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The state’s High Performance Incentive
Program (HPIP) is designed to retain existing
businesses and attract new, high-quality firms,
all while encouraging investments in worker
training and education.
Businesses are able to receive sales tax exemptions,
investment tax credits, workforce training
tax credits, and other incentives through
HPIP. The program’s incentives are available
to manufacturers, certain business service
firms, corporate headquarters, and "back-office"
operations of national or multi-national corporations.
Credits may be used against 100% of annual
income tax liability and carried forward for
10 years.
Please refer to the table below for further
explanation and requirements. |
|
 |
| Credit may be used against
100 percent of annual income tax liability
and carried forward for ten years. |
| REQUIREMENTS: |
|
|
1. Company pays above-average
wages.
2. Company invests at least two percent of
payroll in training or is participating in
one of the state’s workforce training
programs.
3. Business is in major SIC category of 20-51
or 60-89.
4. If business is in major SIC category of
40-51 or 60-89, more than half of sales are
to Kansas manufacturers and/or out-of-state
commercial or government customers.
5. For any investment on which the company
anticipates claiming a related tax credit
through HPIP, a Capital Investment Project
Description must be submitted before the company
has committed to that investment. |
| ASSUMPTIONS: |
|
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1.
Capital investment
(all expenses in this example go toward
equipment) |
$500,000 |
2.
Number of jobs created*
(not required to qualify for HPIP) |
30 |
| 3.
Annual payroll |
$1,000,000 |
4.
Investment in training
(may utilize state training programs: KIT,
KIR, SKILL) |
$60,000 |
| 5.
Approved consultant expenses |
$20,000 |
| 6.
Year’s income tax liability |
$75,000 |
| BENEFITS: |
|
|
1.
Employee training credit
(exceeding two percent of annual payroll;
max. $50,000) |
$40,000 |
2.
Sales tax exemption on capital investment**
(capital investment x 5.3 percent plus
any local sales tax) |
$26,500 |
3.
Income tax credit for capital investment***
(ten percent of amount exceeding $50,000) |
$45,000 |
4.
Matched consultant fees
(no funding currently approved) |
$0 |
| Total
HPIP Benefit |
$111,500 |
| Less:
Total income tax liability during year of
investment |
$75,000 |
| Benefit
to use toward future tax liability |
$36,500 |
|
* Job Creation
Tax Credit
Qualifying companies may utilize job creation
credit available through the E Zone program.
Unused credits may be carried forward until
exhausted.
Statewide, basic incentive
($1,500 per net new job created)
Or if located in a designated non-metropolitan
region
($2,500 per net new job created) |
$45,000
$75,000 |
** Prior to certification for HPIP, sales
tax exemption may be available through the
E-Zone program.
***Qualifying companies may substitute the
E-Zone investment tax credit for the HPIP
investment tax credit. |
