High Performance Incentive Program

The High Performance Incentive Program (HPIP) provides tax incentives to qualifying employers who pay above average wages, along with having a robust commitment to teach skills development for their workers. 

HPIP provides a 10% tax credit that is eligible for capital investment of at least $50,000 at the company’s facility. In the five metro counties of Douglas, Johnson, Sedgwick, Shawnee and Wyandotte, the threshold is $1 million. The tax credit has a 16-year carryforward provided facilities are able to requalify for HPIP. 

Who Qualifies

To qualify, a company must: 

1. Be a for-profit company subject to state taxes; 
2. Pay wages exceeding the average wage standard (as compared to other similar firms in the same geographical area with matching NAICS codes); 
3. Be either a manufacturer or able to document that most of its sales are to Kansas manufacturers and/or out-of-state businesses or government agencies. 

A business in any NAICS code can qualify if it is a headquarters or back-office operation of a national or multi-national corporation.

Benefits

• A 10% income tax credit on eligible capital investment 
• A sales tax exemption that will be used with the company’s eligible capital investment for the qualified facility
• A training tax credit up to $50,000
• Access to other business assistance programs

Wage Standards

• The wage standards allow companies to wage-qualify a worksite, based on their first three or four digits of their North American Industry Classification System (NAICS) code. 
• Three-digit codes are divided up into six county regions along with six metro counties. Four-digit codes are divided into Eastern Rural, Western Rural and the six metro counties.
• See HPIP Resources for further wage standard information

Application Fees

1. First time certifications – $750; or
2. Re-certifications – $250; or
3. One page carry-forward only – $0.

HPIP Tax Credit Transfers

During the 2021 Legislative Session, Senate Bill 65 was passed and signed by Governor Kelly. This legislation will permit an HPIP certified company to transfer HPIP tax credits, under certain conditions, to another entity or individual.

For projects placed into service on and after January 1, 2021, a taxpayer may transfer up to 50% of the tax credit allowed. The taxpayer may make a transfer to one or more transferees, but the total of all transfers shall not exceed 50% of the taxpayer’s tax credit. The taxpayer shall make the transfer or transfers within a single tax year. The credit may be transferred to any individual or entity and shall be claimed in the year
the credit was transferred against the transferee’s tax liability for the income tax under the Kansas income tax act or the premium tax or privilege fees, or the privilege tax as measured by the net income of financial institutions imposed pursuant to article 11 of chapter 79 of the Kansas Statutes Annotated. The amount of the credit that exceeds the transferee’s tax liability for such year may be carried forward for credit in the succeeding taxable year or years until the total amount of the tax credit is used, except that no such credit shall be carried forward for deduction after the 16th taxable year succeeding the taxable year in which such credit was initially claimed.

In the event the tax credit earned by the taxpayer and transferred to a transferee is later disallowed in whole or in part by the Secretary of Revenue, the taxpayer that originally earned the tax credit shall be liable for repayment to the state in the amount disallowed.

HPIP Resources